A Blast from the Past: The Commission-Only Sales Rep

What is a good answer to the question, do you want to take this commission-only sales role?

“I am curious about the product you are selling, how long the sales cycle is, how complicated the sales process is, and what skills are necessary to sell your product. If the answers are 'quick', 'easy,' and 'few,' then maybe.”

Because a 100% commission sales position isn’t so bad if your company has the essentials to help the sales executive achieve a rewarding compensation. It should offer a great product/service, have a short sales cycle, an excellent customer service department, paid training, and a straightforward pay format. And all of this is not just wishful thinking by the company's leadership but demonstrated by a track record of successful selling.

These are not the criteria, though, that are on the mind of most CEOs, Founders, or company Owners. This structure is usually chosen by businesses that lack reliable access to capital. In a lot of ways, it amounts to a pay-as-you-go plan, as something that is thought to pay for itself from day one. This often suits businesses that don't have the resources to provide competitive base salaries.

To me, 100% commission is very old-school. Today, only about 11% of all sales roles are commission-only. The vast majority pay some form of base salary. Because there are also other implications: A commission-only role demonstrates that what you are selling is a commodity product that should really be sold over the internet or through catalogs.

If a business wants long-term sustainability, salespeople that can support their family, less than 10% staff turnover, and loyalty, then a 100% commission sales plan is not the answer. It works against the above objectives. It only works for business models where you essentially need a breathing body, where nano-second sales cycles are the norm, and where having 80+% sales rep annual turnover doesn’t hurt the business due to low investment in the reps.

The turnover rates are just too high, the vast majority of commission-only sales reps fail to make a livable wage and are forced to leave for greener pastures, and it's nearly impossible to find A-Players willing to accept this type of position. On the other hand, there is always someone desperate enough…

Those sales professionals who do manage to succeed in a 100% commission job tend to be risk-takers with a strong entrepreneurial itch. They almost always decide that they would be much better off putting their talents to work in their own ventures.

A salesperson not accepting a commission-only sales role does not mean that “they aren’t hungry and motivated” or “they don’t believe in themselves.” It means they are smart.

The 100% commission sales position is a lose-lose proposition.

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Talk to us to find out what compensation plan might work best for your business.