100% Commission

I’m thinking of getting into sales. I’ve always worked for someone else with a steady paycheck. I’d like to hear some of the pitfalls and rewards of taking a sales job where it’s 100% commission.

might work 4 you

It would not work for me – I can’t sell ICE in Florida

I’d consider a job with a base salary and commission. Straight commission can be lucrative but there might be months where you sell very little. Bills don’t stop because you have a bad month

So much depends on product and what kind of demand. Is it a weekly demand item, or once or twice in a lifetime ? Will 1 sale net you $5 or $5000 ? Too many variables, but if you have the drive and clients available, working for yourself, sure would be nice to write your own paycheck

I’m a General Contractor and guide in a spare time. I think the biggest adjustment is understanding how well you can budget money. The old analogy of feast or famine is usually very true.
Most of my neighbors are manufacture reps and are 100% commission based sales. The largest fluctuation I see in all of our incomes is directly tied into the types of products or services sold. Luxury items are the first things to be cut back upon when the economy takes a dump or when people have a fear of the future of their jobs. Products or services that are tied directly to necessity items will generally have a steady stream of revenue, but often pays less.
Are you going to be an employee or contracted sales rep? As a contracted sales rep, you could possibly have many more tax deductions available to you. As an independent, health care costs, and other “benefits” are at your expense. So be sure to research that thoroughly if your going that route. Also, if you in an industry where most of your customers will need a high level of support throughout a sale (and post sale activities), think about things like vacation, time away, and how these situations will be covered. Will you need to comp another rep? I suggest that based on one of my friends. He’s an independent manufacture rep and runs a very small sales office. His sales are all industrial services and his customers are in desperate need at the point and time they call him. In order for him to take a couple days off, he needs to sub-contract coverage for his phones/services while gone.
Otherwise, Sales positions have the glory and failure of risk/reward. Its always exhilarating to close a big deal, but you’ll hear NO a lot more often. Just can not take too much of the rejection personally, or your enthusiasm will diminish.
Good Luck

I’m a self employed manufacturers rep and Randy’s comments are right on.

I was fortunate to have saved enough to have a safety net when I started. Since then some years have been very good. The last couple, not so much.

I Agree with what Randy said 100%.

Another thing to keep in mind is that no paycheck will ever be the same as another, which is why budgeting is so important. Depending on your industry, You may find that some months are more busy than others and that will influence your monthly income as well.

Until youre able to fully determine what the sales cycle will potentially look like for your industry and get some time in the field to get an idea of what your income stream may look like moving forward, I would strongly suggest having some financial reserves available.

When I first became self employed 4 years ago, I rushed the decision before I was financially ready and I had to rely on borrowing money from a financial institution to get me by that first year. 3 years later I’m still paying for that mistake and I’ll probably pay the bank back twice of what I actually borrowed.

What type of sales…

I think you need to explain a little more detail. I am in health insurance, it can take 2-3 years to actually start making money, specially since you have to build a client base first!

I know an agent whos been in the game for 4 years now and she makes less then someone who works 40 hours a week at 15 bucks an hour.

The insurance business is a tough market. I do agree with what other people say. Its about budgeting. Just because you had 3 good months in a row doesnt mean the next 4 are going to be the same. you could go the next 4 months with hardly any sales!!!

I have been in sales for 25+ years. It is a lot of work, and a very high stress job. If you are good, you can make a very good living.

Some straight commission jobs are very desirable. But most are not. In either case, you need to be prepared to have enough cash on hand to support yourself during the time that it takes you to build a business that supports you.

Whatever they tell you as far as earnings; cut it in half. Take the time that they say it will take you to get to X dollars per month in commission and double it.

here’s my .02 cents.

Most have touched on the basics, what was helpful for me 13 years ago was having a wife with a steady income and benefits which provided me and the kids health/dental coverage. Be ready for a year or two of no profits, just put money back into your business. The thing I considered when looking at a career in the insurance industry was where I would be at in my current job 1, 2 or 5 years down the road. I could alomost figure out what kind of income I’d have in 5 years if I stayed where I was at. Even though I would bust my butt, I’d still get paid the same. Through hard work, long weeks, and constant relationship building, I’d say I did the right thing.