What Are Selling Expenses?

Sales expenses refer to various expenses incurred in the process of selling goods and materials and providing services by the enterprise, including insurance, packaging, exhibition and advertising costs, product maintenance costs, and expected product quality assurance Loss, transportation, loading and unloading expenses, etc., and operating expenses such as employee compensation, business expenses, depreciation expenses, etc. of the sales organization (including sales outlets, after-sales service outlets, etc.) specially designed to sell its own products. The follow-up expenses such as the repair costs of fixed assets related to the special sales agency incurred by the enterprise also belong to the sales expenses.

sales expense

Set up an independent sales organization (e.g. sales department, manager department)

I. Undergraduate projects

Cannibalizing profits. Profit maximization is the goal pursued by enterprises. Profits are maximized at the point that marginal income equals marginal expenditure. The goal of the marketing director is to find this best match point. However, the desire of the marketing director may sometimes be missed, and the increase in expenditures is much faster than the increase in benefits, which will be manifested as merciless cannibalization of sales expenses.

Corroded sales tissue body. "The world is full of benefits, all are good; the world is good, all are good." The marketing combat power is condensed by interests. This is true. But when

Sales expenses change management direction

With the intensification of competition, most industries and enterprises have entered the era of meager profits. Under such a situation, it is imperative to control unreasonable marketing expenditures and reduce expenditures. Extensive management has been unable to meet the requirements of fierce competition, and marketing is also the same, and it needs to shift to refined marketing. Refined marketing focuses on improving the effectiveness of the marketing organization, working from the configuration of sales staff, the execution of marketing strategies, and the control of marketing expenses. Refined marketing strives to create such a marketing ecosystem: with the operation of marketing organizations as the core, assisted by planning agencies, research companies, advertising companies, media, etc., to create the most solid marketing platform, so that people and organizations in this ecosystem Can play the biggest role.

Sales expenses strengthen budget management

Cutting sales costs

Establishing an approval and tracking system for extra-budgetary funds

The sales expense budget is based on the sales revenue budget. Through the analysis of the relationship between sales revenue, sales profit and sales expenses, we strive to achieve the most effective use of sales expenses. Since the sales expense budget has been determined before the beginning of the year, the planning of the sales cost for the coming year cannot represent the actual situation of the sales expense after all. Therefore, we use a flexible method to prepare the sales expense budget in order to facilitate the budget indicators. Make some adjustments. The funds for temporary adjustment of sales expenses are called extra-budgetary funds, and extra-budgetary funds should also be included in the sales expense management system. Examination and approval of extra-budgetary funds must go through a rigorous process, with approval limits and authority, and a fund use tracking system for who approves and who is responsible.

Management system for sales expenses

The sales expense management system includes salesperson compensation system, travel expense management system, training expense management system, hospitality expense management system, advertising expense management system, public relations expense management system, discount and discount system, accounts receivable management system, and storage cost management. System, after-sales service expense management system, etc. The expense policy is called a great magic weapon for sales staff. To establish a clear expense system, it is necessary to ensure that the sales staff cannot use the magic weapon to deceive and put a tight ring on the sales staff.

A sound financial system for selling expenses

If the finance department is reduced to the bookkeeping department, the finance department is just a tool for reimbursement and account taking to the sales department. However, the development of the situation requires the enhancement of the functions of the financial department, not only for accounting, but also for analysis of financial data, so the financial system needs to be gradually improved. Understanding finance is not only a matter for the financial department. As a marketing director, it is also particularly sensitive to the following financial indicators and focuses on monitoring:

Analyze the indicators of the overall sales situation. Such as sales profit margin, sales growth rate, market share and so on.

Analyze the indicators of product structure. Such as the growth rate of new product sales, the ratio of new product sales to total sales, the growth rate of main product sales, and so on.

Analyze indicators of collections and inventory. Such as accounts receivable turnover rate, inventory turnover rate and so on.

Analyze metrics for selling expenses. Such as sales expense ratio, sales expense growth rate and so on.

Design salary system for sales expenses

The salaries of sales staff should be relatively generous in all types of work, and companies have basically implemented a basic salary plus commission system, and there may be some dividends at the end of the year. It's just that commissions and dividends vary by industry and company. Generally speaking, the higher the level, the greater the proportion of basic salary. At the sales director, more than 70% of the income is the basic salary, and the floating salary is less than 30%. In the end, some options may be added. This is also due to the nature of work in different positions. decided. The closer to the sales staff at the grassroots level, the greater the subjective initiative requirements. Increasing the proportion of incentive wages can stimulate the potential of sales staff. The higher the level, the more the management factors increase, and the higher the requirements on strategy and tactics. Increasing the basic salary ratio can stabilize the military mind and maintain the consistency of the strategy. The development stage an enterprise is in and the salary level in the same industry will also affect the salary design of the enterprise.

While maintaining the stability and continuity of the design of the sales personnel compensation system, it is necessary to reflect the focus of current marketing management. For example, for companies implementing credit sales, their salaries must be linked to accounts receivable; in order to increase sales of new products, it is necessary to treat new and old products differently in terms of salaries; for products that adopt floating prices, prices must be based The salary is determined by the grade; the enterprise whose sales performance has a large impact on profit should refer to the profit to determine the salary. In these compensation determination methods, it is difficult to determine whether the sales expenses are related to compensation. Some companies implement a system of outsourcing sales expenses, and some companies implement a system of actual reimbursement. For those who can determine the person responsible for the use of extra-budgetary funds, if any violations occur in their use, they must be reflected in the compensation system.