Sales and Sales people are a necessary requirement for most businesses, however, for many companies there is a direct conflict when a business want highly motivated sales people and paying them a salary.
For many businesses they might allow sales people to draw a salary for a number of months before converting to just commission, to get their feet wet so to speak. However, many sales people are gone not long after the salary period is over. The reason this happens varies, but a topic for another post. How to hire highly skilled sales people on just commission however is something we’re going to look at more closely.
Most people are motivated to earn money, that’s a given. Some people are more motivated than others, and if you are dealing with commission only sales people they should love two things: Making sales and earning awesome commission checks, why? Because they love making money!
So if you want to understand better 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. This could include sales goal bonuses, a higher commission rate – possibly even them specifying their preferred rate, to offering a solid contract that allows them to be wanting to increase their sales as much as possible. No matter the offering, anyone working on commission only wants it to be worth the risk for giving up a salary and possibly benefits.
Imagine you have two sales people: John Doe and Jane Doe. John Doe is a manufacturers sales rep that gets paid a $50,000 base salary and a 1% commission on any sales. John does approximately $2 million in sales a year, giving him an extra $20,000, and as long as he at a minimum makes his managers happy and he can live within $70,000 of income a year, he’s happy.
Now Jane, she’s a straight commission only sales person. Jane makes 7% commission, but 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! This amount can go even higher for Jane if she’s in a position to make a markup on her sales in addition to earning a commission.
The lesson to learn here is that how to hire highly skilled sales people on just commission requires them to see that going commission only pays off – and by enough of a margin to make the risk worth the reward. It’s often as simple as that!
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