Compensation given by a principal to a party (usually an agent, intermediary, or sales representative) representing it. Sales commission, a percentage of the selling price (usually without including transportations costs), is the most commonly way to pay sales services in foreign trade. Principals using commission for its agents or representatives, normally increase their selling prices to provide for such commission payments. Sales commission agreements often provide that the commissions are not paid until such time as the buyer has paid the principal, thereby assuring that the agent or representative will assist with necessary collection effort. See agent; intermediary; sales representative. Model of International Sales Commission Agreement.

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