A pricing structure where a service or product’s cost does not include any portion allocated as sales commission is characterized by a fixed amount. For example, a hotel room might be offered at a predetermined price that remains consistent regardless of booking source or sales agent involvement; no percentage of this price is then distributed as an incentive or compensation to sales personnel. This contrasts with structures where a portion of the revenue generated directly contributes to a sales representative’s earnings.
The application of such a fixed pricing model provides predictability in budgeting and cost management. Its utilization streamlines financial forecasting and removes the variable of commission payouts. Historically, it has been prevalent in industries where consistency and price transparency are paramount, fostering trust with customers by ensuring uniform pricing across all sales channels and preventing potential conflicts of interest related to commission-driven sales tactics.
