As sales recruiters, we get calls on a daily basis from new and even mature companies asking if we recruit commission only sales people.  We always give them the same answer: no. In all of our experience, we have not met with one company that has had success hiring commission only sales reps for a new or emerging business. The main reasons companies look to go this route is they are unsure of how to hire a good sales person, they don’t know how to compensate them and most new companies aren’t sure how to manage sales people. They want to mitigate their risk. In theory, that makes sense but practically, it’s a bad idea.

There are 4 main reasons why hiring commission only sales people is a bad idea:

• You get what you pay for. In our experience, if someone is willing to work for free it means they are desperate and/or unable to find another job
• Good sales people command good base salaries. We recruit for inside sales roles that pay base salaries over $60,000. If you want the best, be prepared to pay.
• You cannot hold them accountable. If you are not paying someone a salary, it is extremely difficult to hold them accountable to daily activities and process let alone sales targets.
• They are representing your brand. The damage someone can do to your brand can be very costly and is something that most business owners to consider when trying to hire sales people.

John Warrillow of the Globe and Mail wrote a great article this week advising companies not to hire commission only sales reps. Warrillow suggests companies looking for commission on sales people should:

• Hire at least 2 sales people for competition and to ensure both are being productive
• As a rule of thumb pay reps 50% base salary and 50% commission. At the very least, we think this is a good starting point for most organizations.
• Use the feedback sales people get from customers to improve your product or service

Most companies are better off waiting until they can afford to hire 2 reps and have the owner do the selling. By doing this you will know firsthand what a sales person needs to do in order to be successful in the role. Once you do have the budget for a sales team, make sure they are equipped with the tools, training and support they will need to sell. In the long run, this will save you a lot of money.

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