Be Careful With Commission-Only Sales Staffs

Cons may outweigh cost and other pros

Who are the best employees on any company’s payroll?  Well, from a certain perspective, they’re the ones who don’t get any money unless they work hard.  There are some downsides to having a commission-only sales staff, however.

Look at the issue of loyalty, for one.  The pursuit of more money may cause commission-only employees to sell more stuff, but you provide them with little reason to prefer your company over any other.  Also, if they’re not in it for the long-term, their sales tactics might not line up with your preferred way of doing things.

And that’s even assuming you can find commission-only people in the first place.  Jo Prabhu, a member of the Society for Human Resources, talked to Shara Rutberg and said, "They’re becoming a dying breed.  Sales reps change industries, jobs and locations.  Today, it seems everyone wants a more secure type of position."

Perhaps money isn’t tight at your company, but the economy isn’t being so kind to everyone.  If you start looking for corners (and employees) to cut, a salaried sales staff may be best left alone.

There is 1 Comment. Add Yours.
  1. Guest

    There is definite loyalty if the product is marketable,  the commission payout is strong and the Company has the infrastructure to process and manage the sales. Salaried reps may feel secure, but may tend to settle for what they are paid and may even take on additional products where higher commissions are paid as a motivational, similar to taking on a second job. Commission only reps tend to make much higher commissions and stay focused where the revenue stream is, particularly when the product or service offered adds value for our customer base. Those that have been successfully independent are accustomed to closing sales and reaping the benefits from commission as we are RESULTS DRIVEN. Loyalty is earned by numerous entities and should not be confused with security based from a salary. When a company saves on a salaried rep, they additionally save on the costs for benefits, taxes, etc. a $50,000 salary save probably equates well over $100,000 savings. Take that, times10 reps, and invest some in marketing and entice with higher commission rates for the reps.

What do you think? Respond.

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>