For sales heads, finance controllers and incentive analysts checking what each product line earns and sells, before it goes into a comp plan.
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Result Margin
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Result Margin Percentage
Subtract the line's cost of goods sold from its revenue, divide by revenue and multiply by 100. A line with ₹60 lakh of revenue and ₹45 lakh of cost has a margin of 25%. Use net revenue after returns and discounts. The net sales calculator gives that figure if your report shows gross sales.
Pay on margin when your lines earn very different margins. If one line keeps 25% and another 45%, a plan on revenue pays the same for a rupee of each. A margin-linked plan pays more where the business keeps more. Revenue still works when margins are close or cost data arrives late. Either way, incentive compensation management needs cost tied to each sale.
There is no single right share; set it from the target margin of each line. Say a line earns ₹18 lakh of margin in a quarter and pays ₹2.7 lakh in incentives. Its sales compensation cost is then 15% of margin. Track that share by line every period, and test a plan change against revenue before it pays.
Margin divides profit by the selling price. Markup divides the same profit by the cost. A product sold for ₹100 that cost ₹70 has a 30% margin and a 42.86% markup. Incentive slabs written on markup look more generous than the same slab on margin, so state which one the plan uses.
Divide that product's or rep's sales by total sales for the same period and multiply by 100. Line A at ₹60 lakh out of ₹1 crore is 60% of sales. Use the Share of total sales tab above. To see profit across several categories at once, use the sales mix calculator.
Because overall margin is a weighted average of every line. If Line A brings 60% of sales at 25% margin and Line B 40% at 45%, the blended margin is 33%. Growing Line A faster lowers that blend even as revenue rises. Sales performance management tracks the mix by rep so the shift shows within the period.
Govern every payout that buys you growth.
Kennect calculates margin, sales share and payout for every payee from your sales and cost data, with an audit trail.
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