
 

In the equation above, 0.85 is the divisor. To get the divisor, we need to split the retail price which is made up of 15% commission rate which leaves 85% for the base price. This base % is converted into a fraction by dividing it by 100 = 0.85. ( % or percent means 'per hundred' and 'per' in maths means 'divide by' ) Another example: If we wish to offer a 30% discount off an unknown retail price we will need to divide our base price by the remaining 70% , which expressed as a fraction = 70/100 = 0.7. Thus the divisor is 0.7 Let us assume that our base price is say 2,850.00 What is the Retail price ?
For a compound commission or discount structure ... Build up the retail price in stages taking the current retail price as the next base price and so on. That way you can offer a commission structure of say 10% of all sales for the Sales Manager; Sales Reps get 25% of sales and can give discounts of Less 30% for Trade Less 2.5% to settle in 30 days; Your favourite charity gets 1% of sales; and so on. Deducting tax or markup from a price  a task some people find difficult 

last modified : 5th. October 2011