Definition of sales quotas

Individual sales target figure assigned to each sales unit such a sales person, dealer,
distributor, region, or territory, as a required minimum for a specified period
(month, quarter, year). Sales quotas may be expressed either in dollar figures
(monetary terms) or in number of goods or services sold (volume terms).

The sales quota is something used in many environments where goods or

services are sold. It is essentially a target amount of sales that could be assessed
on a daily, weekly or monthly level. Whole selling units (like stores) may have
a quota they must try to meet each month and individual salespeople are also
likely to have a sales quota. One means of assessing performance in the
salesperson is by looking at their ability to hit the target on a regular basis or to
exceed it.

When people talk of the high-pressure atmosphere of employment in sales, it is often due to
this sales quota. The salesperson may know or feel that a job is constantly on the line if they
don’t sell a certain amount of product or a specific dollar amount each month. Some
salespeople additionally work on commission only, which means they don’t get paid if they
don’t sell, or others may work on a draw versus commission basis, where their salary
increases if they meet certain quotas. It is certainly true that quotas are used to motivate the
salesperson, and actually a whole selling unit, since a store of any kind may have to meet
monthly quotas. Failure of one or more people to meet quotas could threaten the jobs of
managers in addition to increasing likelihood that salespeople would lose their jobs.