Hiring highly skilled, commission-only sales people

Sales and sales people are necessary for most businesses. For many companies, though, there is a direct conflict between highly motivated sales people and paying a salary.

In many businesses, sales people draw a salary for a number of months to “get their feet wet” before converting to just commission. However, many salespeople leave the company not long after the salary period is over. The various reasons are probably a topic for another post, but let’s look more closely at how to hire highly skilled sales people on just commission.

Sales people should love two things!

It’s a given that earning money motivates most people. Some people are more motivated than others, but if you are dealing with commission-only salespeople, they should love two things: Making sales and earning awesome commission checks. Why? Because they love making money!

So in order to understand how to hire highly skilled sales people on just commission, you need to make sure that they’re able to earn a commission rate that’s as beneficial to them as possible. Ways to do this could include sales goal bonuses, a higher commission rate (possibly even allowing them to specify their preferred rate), or a solid contract that allows them to want to increase their sales as much as possible. No matter the offering, it has to make working on commission worth the risk of giving up a salary and possibly benefits.

Consider a scenario.

Imagine you have two sales people: John Doe and Jane Doe. John Doe makes a $50,000 base salary and a 1% commission on any sales as a manufacturers sales rep. John does approximately $2 million in sales a year, making him an extra $20,000. As long as he makes his managers happy and he can live within $70,000 of income a year, he’s happy.

Now let’s look at Jane. She’s a straight commission-only sales person. Jane makes 7% commission, but is taking the risk of no income unless she produces. However, if Jane is doing $2 million in sales a year, she’ll earn $140,000! That’s a pretty big difference! If Jane is in the position to make a markup on her sales, this amount can go even higher!

Now what?

The takeaway is commission only can pay off, and the margin is enough to make the risk worth the reward. It’s often as simple as that!

Got feedback? We’d love to hear it!

If you have a catalog-based business looking to increase efficiency and make it even easier for commission-only sales people to earn more, check out Orderwerks!