It seems like a long time ago when what we used to think of as “good jobs,” those that offered solid salaries and bonuses and nice benefits, were plentiful
These days, especially in selling, you’re more likely to scan employment listings and see “straight-commission” compensation schemes. Essentially, these are pay-for-performance opportunities.
If you perform, you get paid; if not, then not.
It’s Darwinian, a survival of the fittest atmosphere. Still, commission jobs tend to offer higher than average potential, and if you can stick it out until the spigot flows, then you can thrive.
Here are 10 questions to ask any employer offering a straight commission pay plan:
(1) How long have you been in business? Beware of start-ups, because no one really knows whether their business concept will succeed.
(2) How well is your top salesperson doing, financially? Key question, this one is. If you hear a solid number, divide it in half and that’s what you’ll probably earn during the first few months.
(3) How long did it take for him or her to get there? This is a vital cash-flow matter. Can you survive until you start seeing regular paychecks? You may not have the time to invest to go from A to B.
(4) How long until your best seller made his first sale? Did he get lucky and close someone on the first day or week? Or, did he struggle? If the best seller struggled, multiply his time invested to the first sale by a factor of at least two or three, for yourself.
(5) Commission plan specifics? What percentage are they paying? Is there an appropriate incentive? Possibly, you can negotiate this to make it more appealing and sufficiently worthwhile to you.
(6) How well is your worst person doing? If they permit folks to struggle for weeks without substantial rewards, that is a bad signal. There should be competition to earn a spot on their team, and the worst performers should be cut quickly.
(7) Is this a scripted sale and can I merge it into my own? If they have a script and it is a proven success, this will save you a lot of time, presuming you follow it. If they allow no deviation from it, either they have selling down to a science or they’re needlessly strict. Especially if you’re on a commission, they shouldn’t care HOW you sell, as long as you sell, and you do it honestly.
(8) Are the hours flexible? If you are an independent contractor, this means you can come and go, with some broad limitations, as you see fit. Some companies have a set start-time, and they want everyone to be there, for announcements, updates, and the like. But if they try to set the workday in concrete, unless they’re paying for your TIME, they’re overreaching. By doing this they deny you one of the upsides of being a commission seller, setting your own pace.
(9) At what intervals are commissions paid? This is significant. If they don’t pay weekly, a flag should go up. You shouldn’t be their bank, which is what you become with sparser pay intervals.
(10) Are there any reserves for charge-backs? When are they released? Charge-backs, or reductions in your commissions-paid, can occur when orders cancel or don’t pay the company, as agreed. Naturally, firms try to protect themselves against paying a commission for a deal that falls through. Accordingly, they may hold back 10-15% of your check. Ask them, when are these funds released to you, and if you leave the job will they still pay you your reserves after you depart?
A commission sales job can be a fantastic opportunity. It offers the prospect of high rewards with flexible hours, and it is perhaps the closest you can come to being in your own business without a lot of the hassles.
But be sure to ask these ten questions before leaping into the fray. It could make the difference between making or missing some serious pay!