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What are Selling Expenses?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 13 November 2016
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Selling expenses are any types of business expenses associated with the efforts to identify potential customers, attract their interest and work with them until they ultimately choose to make a purchase. This type of expenses will often include any costs associated with delivering the ordered goods and collecting the payment for those goods. A number of different business costs are included in this somewhat broad category, including administrative expenses related to sales and sales support, advertising and the preparation of promotional materials, shipping charges, and even the costs related to providing commissions to salespeople.

Many types of selling expenses are associated with equipping salespeople with the tools needed to locate and entice consumers to become customers. Expenses such as the cost of buying and maintaining sales databases, preparing brochures, virtual and print advertisements, and media commercials are all examples of tools that are used to connect with potential customers and generate interest in the products sold by the business. While some of these costs are sometimes segregated into marketing rather than selling costs, it is not unusual for a business to lump all these costs under a common umbrella, while recognizing marketing as an essential aspect of the sales process.

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Other types of selling expenses are more directly related to the work of the salesperson. This would include any salary and commission structure put in place for the sales force, as well as administrative expenses associated with providing sales support teams who handle clerical and other duties for the sales force. Rent and maintenance of sales offices in different regions or jurisdictions of the company would also fall under this category. Travel expenses that are incurred as part of pursuing sales, both in the form of travel to see specific clients or to participate in events that make it possible to interact with prospective customers are normally considered selling expenses.

On the back end of the sales cycle, the selling expenses relate to the costs associated with delivering the desired products to the customer. Here, freight and shipping charges, costs associated with delivering invoices for those orders and even the costs associated with receiving and posting payments from customers are sometimes considered to be among the final selling expenses associated with the sales effort. In the event that an invoice goes into a collections situation, the costs associated with contacting the client and eventually arranging for the payment of that invoice can also be considered a selling expense.

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