Dear Matt: I've been looking into some commission-based sales jobs. I know there is high risk, but also reward, in these types of jobs. I'm not afraid of a challenge, but how do I know if a commission-only job is right for me? What does it take to succeed?
Matt says: Skip Anderson, founder and president of Selling To Consumers Sales Training (SellingToConsumers.com) in St. Paul, says commission sales is the most entrepreneurial of sales positions.
When a person is an entrepreneur, they are giving up security for the opportunity -- and greater risk -- of making more money. The same is true in commission sales, which tend to have the greatest opportunity for income because they also carry the highest risk.
But the risk taker, the person who has the ability to look at the potential long-term rewards, is the type of person who succeeds in this type of job. If you need a steady paycheck every two weeks where you know exactly how much you will make, then a commission-only job is probably not right for you.
Drew Schmitz, sales director at Shuster360 (shuster360.com), a Twin Cities-based technologies and consulting services provider, says there are two things someone pursuing this type of job/career must have: Time and fortitude.
"Sales, much less a straight commission sales job, is obviously not for everyone," said Schmitz, who has worked in and hired for straight commission roles. "If you don't sell, there is little security, and that's why I emphasize time. Most sales jobs are a slow build until they pay well. We learn the product or service better, learn how to sell it better, build momentum and everything gets a lot easier after you have been on the job for six to 12 months. I think you have to be willing to go without a paycheck for two to three months and think worst case scenario if you are going to accept this type of position."
You just need to have the confidence that you will learn the product, you will be able to sell it, and you will survive the rises and falls of commissions in that role, added Schmitz.
Before accepting this type of position, always ask the employer what other individuals in similar roles are earning, said Anderson. Many employers will often want to talk about earning potential, but they don't talk about the challenges it takes to reach that potential. Nobody should take a straight commission position unless they know how much others in the same position have been making historically.
"Just because a position is paid via commission does not mean a candidate should not give it significant consideration," said Anderson. "Many people have become wealthy by working in a commission-based sales position."
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