2 weeks ago
October 24, 2024

Should You Take A Commission Only Sales Job?

Some sales jobs can be defined by sales style, location, the type of clients, industry, or how you get paid. A unique part of working in sales is the high…

Jace Ermidis Toronto Sales Recruiter
Jace Ermidis

Some sales jobs can be defined by sales style, location, the type of clients, industry, or how you get paid. A unique part of working in sales is the high percentage of commission-only sales roles. This type of compensation agreement is less common in other industries. There is the potential for commission-based roles to be highly lucrative. But, as a sales recruiter who’s worked in the sales industry with everyone from startups to blue chippers,  I know there are also some risks to consider. 

In August, I wrote about how to recruit commission-only salespeople. Here, I’ll look at things from the candidate’s perspective. I’ll define sales commission-only jobs and then talk about whether or not you should take a commission-only sales job including 6 benefits of commission-only and 7 potential negatives. This information will help those who are considering working in commission-based jobs. 

What Is A Commission Only Sales Job?

A commission-only sales job pays based on performance. A salesperson is compensated exclusively based on the sales they generate. In this arrangement, the employee does not receive a fixed salary or hourly wage but instead earns a commission—usually a percentage of the revenue from each sale they make. The more they sell, the more they earn.

There are many different types of commission structures. They vary based on the industry, role, experience, and other considerations. 

Why Are Commission-Only Sales Jobs Attractive To Sales Professionals? Here’s 6 Enticing Benefits:

People are often attracted to jobs that offer then autonomy and significant earning potential. This is a reason by commission-only sales jobs are attractive to motivated sales professionals. Here’s what makes these jobs attractive:

  1. Unlimited earning potential: Since income is directly tied to performance, there is usually no cap on how much a salesperson can earn. High achievers can make significantly more money than they might with a fixed salary.
  2. Flexibility and freedom: Commission-only roles often offer more freedom in terms of how and when salespeople work. They can set their schedules, focus on the strategies that work best for them, and manage their own time.
  3. Results-focused: Sales professionals are rewarded based solely on their results. High performers are not limited by the constraints of a fixed salary and feel their efforts are fairly compensated. You are rewarded based on the effort you put into your work. 
  4. Entrepreneurial environment: Sales professionals who enjoy the challenge of creating their own success and thrive in competitive, results-driven environments are drawn to commission-only jobs. It allows them to act like entrepreneurs, managing their own business within the framework of a company.
  5. Growth opportunities: These roles often provide ample opportunities for personal and professional growth. As salespeople hone their skills, develop relationships, and learn more about their industry, their income can grow in parallel.
  6. Job satisfaction: Many commission-based sales professionals find personal satisfaction in knowing their hard work directly influences their financial success, offering a clear connection between effort and reward.

Commission-Only Sales Job "Everything in life is a sale" quote

For those confident in their sales abilities and seeking high rewards for performance, commission-only jobs offer significant appeal. However, there are some potential drawbacks that you need to understand before working on commission. 

What Are The Disadvantages of Commission in Sales? 7 Potential Negatives To Think About

There are some inherent risks to working in a commission-only sales environment. It’s not for everyone and many struggle. So, it’s essential for people to be fully aware of the disadvances of commission jobs in sales before accepting a job offer. 

1. Income instability

This is perhaps the biggest drawback of working in this type of environment. Without a fixed salary, income can be highly unpredictable. In slow months, salespeople may earn little to no money, which can create financial stress. This is particularly challenging in industries where sales cycles are long or seasonal. 

2. High pressure

Sales professionals on commission-only pay often face intense pressure to close deals constantly. You will face pressure from management and you will also feel pressure from yourself to perform. This pressure can lead to stress, burnout, or frustration, especially in competitive industries or markets.

3. Minimal benefits

Commission roles are more entrepreneurial. Companies often treat commission salespeople like contractors rather than employees. So, many commission-only roles do not offer standard employment benefits such as health insurance, paid time off, or retirement contributions. This means salespeople must often handle these expenses on their own, which can reduce overall earnings.

4. Unstable work-life balance

To maximize earnings, many commission-based sales professionals feel compelled to work long hours or take on additional responsibilities. This can lead to difficulty maintaining a healthy work-life balance, particularly if they feel they need to constantly hustle to make ends meet. Many professionals work evenings and weekends. 

6. It’s extremely competitive

Expect competition from everywhere. You are incompetent with other companies and even other sales reps from your own company. In a high-pressure, commission-only environment, some individuals may resort to unethical sales practices to meet quotas and earn commissions.

7. Lack of job security

If you don’t sell, you don’t make money. Since earnings are entirely commission-based, there is little financial security in a downturn or during slow periods. If sales dry up, so does income, creating a high-risk situation for salespeople.

These challenges can make commission-based roles unsuitable for some individuals, especially those who prefer a stable and predictable income or struggle with high-pressure environments.

Final Thoughts – Should You Take A Commision-Only Sales Job?

Commission-only sales jobs offer significant earning potential and freedom, making them attractive to ambitious and self-driven sales professionals. However, the lack of income stability, and benefits, and the high-pressure environment can make these roles risky and unsuitable for those who prefer a more predictable and secure career path. Before accepting a commission-only sales job, it’s essential to thoroughly understand both the rewards and the potential challenges to ensure it align with your personal and professional goals. Careful consideration of your risk tolerance and ability to thrive under pressure is key to success in such roles.

More Salary Advice For Sales Job Candidates

We all want to get paid well for our efforts. Here are some more articles about sales job salaries that can help you make informed compensation decisions:

Are You Getting Paid Fairly As A Salesperson? 5 Compensation Types & 6 Things To Watch Out For

Looking for a Pay Raise? Why You May Need to Switch Sales Jobs to Get It

Know Your Value: How Sales Recruiters Can Help You Ask For The Right Salary

4 Ways to Maximize Your Salary Negotiation for Sales Jobs

 

Jace Ermidis Toronto Sales Recruiter

Jace Ermidis

Jace is a sales recruiter with almost a decade of experience building high-performing sales teams in North America, across Europe, Asia, and Australia. He also has plenty of tips to help your sales team increase revenue!

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