Working on commission vs. salary

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When working in sales or looking for work in sales, there is always the question of whether it is better to work on commission or salary. The right answer can be either one depending on the situation. Many people are afraid when they hear that a job pays on commission basis only. Generally speaking however, commission only compensation has a higher earning potential than a salary based compensation. However, this only applies to someone that is a good sales person and that cares about the job.

The first question you need to ask yourself is if this new job will be just a job or a career for you. If it is just a job then you have to make sure you really care about this job in order to go with commission only. Usually, if it is a career then it means that you will try hard and care about doing well. In this case, commission based compensation, especially commission only has the highest earning potential possible. Make sure you’ve negotiated a high commission rate as this is crucial to a commission only compensation.

Next, you have to be confident in your abilities as a sales person. If you don’t believe that you’re very good at sales then do NOT work on commission. The most important factor to being a good sales person is confidence. Without confidence you will almost certainly not be a very good sales person. In this case, choose to work on salary based compensation. Also, in this case you might want to consider a different line of work all together.

To sum up, if the position you’re looking at is a career for you or at least a job that you really care about and want to do well in and in addition, you are confident that you are a good sales person then commission is the way to go. In this case, you should not be afraid by the words commission based compensation. In fact, you should seek out this type of position. If you already work in sales and you earn a salary plus commission, calculate how much money you would earn if you switched to only commission at a higher commission rate. If you earn more this way, ask your employer to change your compensation structure. Often time companies will be happy to switch to only commission because they take on zero risk. Commission is something to embrace, not avoid.