Definition of sales quota

minimum sales volume goal established by the seller. A sales quota may be expressed in terms of dollars or units sold. Quotas may also be set for sales activity (number of calls per day), sales costs and profitability in addition to sales volume. A sales quota may be required of a salaried or commissioned salesperson or may be a goal set for a brand, a product line, or a company division. Sales quotas are used to ensure that company sales goals are met even though they may exceed an individual salesperson's personal goals or abilities. Sales quotas also ensure that the volume sold will cover the fixed costs of producing the product or service. Sales quotas should be high enough to encourage excellence but not so high as to be unachieveable, thereby discouraging the sales force. Failure to meet sales quotas is an immediate call for action on the part of the seller. If a salesperson fails to meet quota, the salesperson may be given a smaller or less desirable prospect territory or may be terminated. A salesperson may receive a bonus for exceeding the sales quota.