B2B Sales

Commission in B2B Sales

B2B sales (business-to-business) covers a broad spectrum of industries where companies sell products or services to other companies. The B2B market constitutes the largest share of total revenue, and commission is the standard compensation for salespeople in this market.

Commission models in B2B sales vary significantly based on sales cycle, contract size, and product complexity. Long sales processes and high order values typically characterize B2B sales compared to B2C.

Typical Commission Structures

Roles and OTE in B2B Sales

On-Target Earnings for B2B salespeople varies significantly by role and segment:

• VP of Sales: $175,000-290,000 annually
• Enterprise Account Executive: $130,000-215,000 annually
• Mid-Market Account Executive: $100,000-145,000 annually
• SMB Account Executive: $70,000-110,000 annually
• Sales Development Rep (SDR): $58,000-80,000 annually

Bonus Structures

Beyond standard commission, many B2B organizations include supplementary incentives:

• Accelerators: Increased commission when exceeding quota
• SPIFFs: Short-term bonuses for specific products or campaigns
• Quarterly bonuses: Extra reward for hitting quarterly targets
• Presidents Club: Annual recognition and trip for top performers

Split Models

In complex B2B sales, multiple people are often involved in the sales process. Typical split structures:

• SDR/AE split: SDR receives 10-20% of commission for qualified leads that convert
• Team selling: For enterprise deals, commission may be split between multiple AEs
• Overlay roles: Specialists like solutions engineers may receive a smaller portion of commission

Special Considerations

B2B sales has several unique characteristics that affect commission design:

• Long payment terms: B2B clients often have 30-90 days credit
• Multi-year contracts: Commission may be distributed over the contract period or paid upfront
• Renewals: Often reduced commission (25-50% of new sales) for renewals
• Upsell vs. new logo: Different commission for sales to existing vs. new customers

To avoid disputes, many companies use tiered commission structures that clearly define commission at different levels.

FAQ About B2B Commission

What is a typical base/variable split?

In B2B sales, 50/50 or 60/40 (base/variable) is most common. For transactional sales, the split may be 40/60 or even 30/70.

How does sales cycle affect commission?

The longer the sales cycle, the lower the commission rate. This is compensated by higher order values and often guaranteed base salary during the ramp-up period.

What happens to commission upon resignation?

Most B2B organizations have rules about pipeline ownership upon resignation. Late-stage deals may still generate commission, while early-stage deals transfer to others.