Question: The portion of the sales commission split that is paid to the brokerage and NOT to the associate is called:
a. Net operating income
b. Potential gross income
c. Effective gross income
d. Company dollar
The correct answer is “d”: Company dollar
One more question.
Question: The Company Dollar In A Real Estate Brokerage Firm That Only Does Real Estate Sales Is:
A) The Net Profit From Operations
B) The Company’s Share Of The Revenues Generated By Commissions Paid To The Firm.
C) The Commission Revenue Paid To The Firm.
D) The Gross Profit From Operations
Company Dollar Meaning
Company Dollar, also known as Gross Margin, is the portion of the commission (or fees) that a brokerage keeps after its representatives take their cut. It’s been well recorded that Company Dollar has actually been in a long-term decline, with a myriad of reasons precipitating this downward pattern.
Retained Company Dollar
Recently, we completed the year-end upgrade of our brokerage standard report, which reveals fascinating monetary and functional industry trends. Each metric narrates; however, none means a louder one than Retained Company Dollar.
Company Dollar also referred to as Gross Margin, is the part of the commission (or costs) that a brokerage keeps after its representatives take their cut. It’s been well recorded that Company Dollar has actually remained in a long-term decline, with a myriad of factors precipitating this downward trend.
This decline has actually been significant enough that many of the standard brokerage companies have needed to significantly change the method they operate to remain in service. Brokers have been yearning for an end to the carnage that’s positioned incredible pressure on their bottom line.
We’ve seen Company Dollar slide from an average of 30%+ a couple of decades ago to sub-20% in 2013 to simply under 15% in 2017. With 2018 ticking up over 15%, there was hope that we’d seen the bottom. However, another decrease in 2015 shattered that notion.
In 2019, Company Dollar retreated to an all-time low, with the nationwide typical dipping listed below 14%. It’s tough to think that, usually, brokers only keep 14 cents of every dollar of the commission made! You won’t discover numerous brokers/owners who’ll deny that it’s been a grind running their services in the last few years.
Company Dollar varies extremely between each of these types. This mean average likewise consists of widespread geographical variety, integrating higher-Retained-CO$-firms on the East Coast along with companies on the West Coast that tend to sport lower Company Dollar.
These intricacies do not take away from the higher trend. Even if we segmented our benchmark using the qualifiers pointed out above (which we do for our assessment clients), we’d see the very same down pattern. It’s a discouraging pattern that asks the question, exists an end in sight?
At ANSHELL, we believe that completion remains insight which this end will be in the extremely near term. Continuous pressure on margins will reach a point of exhaustion, and an equilibrium will be discovered that allows brokers of all types to generate income in this market still. As our clients do so, very intently, we’ll continue to keep a close eye on Company Dollar.
GCI Meaning in Real Estate
What is Gross Commission Income GCI?
The Gross Commissions Income (GCI) reflects the total amount made before any splits.
The Company Dollar is the total amount the company made after any splits from the GCI.
If the lifeblood of any business is a return on revenue, then the critical vital is retained company dollar.