Which term defines a fee or payment for services based on a percentage of products sold?

Which term defines a fee or payment for services based on a percentage of products sold?

• A. Commission
• B. Compensation
• C. Competitive advantage
• D. Consumer show

Answer: (A)

The concept here is a fee earned for selling or facilitating a sale that is tied directly to the value of what’s sold. This is known as a commission. A commission is calculated as a percentage of the products or services sold, so the better the sale, the more earned. This structure motivates the person providing the service to maximize sales, which is why it’s common for sales agents, travel consultants, brokers, and other roles in hospitality and tourism. For example, if a travel agent books a $2,000 package with an 8% commission, the agent earns $160. In contrast, compensation is a broader term for pay and isn’t necessarily linked to sales volume; competitive advantage refers to how a business differentiates itself from competitors; and a consumer show is an event where products are displayed to buyers and the public. Therefore, the term that defines a fee based on a percentage of products sold is commission.

The concept here is a fee earned for selling or facilitating a sale that is tied directly to the value of what’s sold. This is known as a commission. A commission is calculated as a percentage of the products or services sold, so the better the sale, the more earned. This structure motivates the person providing the service to maximize sales, which is why it’s common for sales agents, travel consultants, brokers, and other roles in hospitality and tourism. For example, if a travel agent books a $2,000 package with an 8% commission, the agent earns $160.

In contrast, compensation is a broader term for pay and isn’t necessarily linked to sales volume; competitive advantage refers to how a business differentiates itself from competitors; and a consumer show is an event where products are displayed to buyers and the public. Therefore, the term that defines a fee based on a percentage of products sold is commission.