Get Active in Our Amazing Community of Over 451,000 Peers!

Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Case Partners to connect and practice with!

How to design a commission table?

operations cases
New answer on Jan 12, 2021
3 Answers
966 Views
Dan asked on Jan 10, 2021
Looking to practice TMT cases (primarily telecom)

Hello.

I'm thinking about a business problem. Could you please help a bit?

Say we are a curated well-established B2C marketplace. What are the key factors that would define our commission collected from partners' orders on the marketplace?

I would think about rewarding (with lower commission) the partners with:

  • larger gross merchandise volume
  • more extensive product range
  • larger geography of sales (in terms of countries)
  • partners who use our additional services to promote their products on our marketplace

Cheers!

(edited)

Overview of answers

Upvotes
  • Upvotes
  • Date ascending
  • Date descending
Best answer
Ian
Expert
Content Creator
replied on Jan 11, 2021
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi Dan,

Fundamentally, you have to say:

a) What matters (to our business)

b) What commission strructures change behavior to impact what matters

We need to determine the above before going any further! Then, the scale needs to also incentivize and "stretch" sales

Was this answer helpful?
Vlad
Expert
replied on Jan 10, 2021
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

The most common issue with the marketplace is the lack of supply.

Thus, you should incentivize the supply to accept certain orders by lowering commissions / increasing pricing for customers

Best

Was this answer helpful?
Clara
Expert
Content Creator
replied on Jan 12, 2021
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

On top of what has been shared beofre, I would advise you to look at retail and ecommerce cases. If you don´t have any, feel free to PM and I will share with you

Hope it helps!

Cheers,

Clara

Was this answer helpful?
Ian gave the best answer

Ian

Content Creator
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
1,096
Meetings
77,503
Q&A Upvotes
232
Awards
5.0
151 Reviews