Taking on Sales Staff - Commission only?

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A

APW

  • #1
    I am thinking of employing a sales agent for B2B sales.

    I am a big believer that commission only jobs don't attract great sales people so I want to avoid this.

    My plan is to give a basic wage + Commission per sale however I am concerned about how to find the best people and not the bluffers after a wage without making sales.

    I thought about doing a 2 week trial which would be paid commission only then if targets are hit offer the job with basic wage, is this legal and would this put potential sales staff off working for me?

    What do you guys think?
     
    M

    Mr D

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  • #2
    The 2 week trial would put me off. Now if you offered say a commission only trial with 75% commission but then switched afterwards to a wage plus lower commission....?

    Offer what they are going to get - if they aren't any good you will find out within a few months anyway. Switching between income levels isn't always a good idea.
     
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    Mark T Jones

    Mark T Jones

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  • #3
    I don’t know your product or market, but 2 weeks seems an incredibly short time to realistically gauge a salespersons performance or potential

    Taking on sales staff - whatever the basis of remuneration is a business investment and needs to be factored over a realistic period

    From experience, many of the best sales people are only interested in commission only roles.
     
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    Paul Norman

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  • #4
    As Mark says, two weeks seems insufficient a time to judge a sales persons ability to make sales - depending a little on what you are asking them to sell.

    You are right that taking on an employee is a risk. But that is how business works. The business takes the risk. The best way to reduce that is to recruit well, and to manage well once they are recruited.

    Don't just hire someone after a one hour chat. And don't interview alone unless you are a very experienced interviewer. Do take up references. Do establish a track record.

    It is still not risk free. You might be out of pocket. But, equally, by doing the job well you might end up with a very good team member. I would drop the two weeks on commission only bit.
     
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    F

    Financial-Modeller

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  • #5
    From direct experience, the most important aspect for B2B sales is getting an experienced salesperson who knows their market well.

    Agree a package that suits both the salesperson and you - probably based on increasing their current package - ideally with fixed salary plus commission / bonus up to x% of target, then a greater commission/bonus element thereafter.

    Taking inexperienced people into B2B sales roles can be a false economy, by the time you account for their direct cost, your management time, and the potential for reputational damage.

    Also, remember that whatever the package offered, salespeople will always game it to their advantage, and the good ones will usually be ahead of you, when you make changes!
     
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    A

    APW

  • #6
    Thanks for all the responses, food for thought.

    My own personal experience, when I hear commission only I think of Avon or Ann summers where the company have no real faith on the sales agent making enough money.

    What would be the pitfalls of hiring someone who doesn't meet the targets, can they be fired for that or is that unfair dismissal, thats why I was thinking of a short trial before becoming salaried.

    Edit - the average sales would be between £150 - £500. My thought was basic wage plus 25% of each sale, or am I well off the mark here?
     
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    M

    MBE2017

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    • Feb 16, 2017
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  • #7
    You need to consider several things when deciding how to reward a salesperson.

    How long does it take to make a sale?
    How often are you likely to deal with the client, a lifetime client is likely to offer different value to a one off sale.
    Cancellation/clawbacks. The list goes on.

    As Paul Norman advised, you tend to get what you deserve, companies often see salespeople as low value, the clever ones see them in a different light. Do you want to be constantly recruiting or recruit and keep good people?

    Whatever you do make any targets realistic, if 5 sales a month is good don’t make the target 30, all it will do is make most guys quit very fast. I have worked commission only and a mix of salary and commission, the same results. I work for my reward, pitch the deal right and you should make good money as well.

    Out of interest, how many deals have you sold?
     
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    Mark T Jones

    Mark T Jones

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  • #8
    APW said:
    Thanks for all the responses, food for thought.

    My own personal experience, when I hear commission only I think of Avon or Ann summers where the company have no real faith on the sales agent making enough money.

    What would be the pitfalls of hiring someone who doesn't meet the targets, can they be fired for that or is that unfair dismissal, thats why I was thinking of a short trial before becoming salaried.

    Edit - the average sales would be between £150 - £500. My thought was basic wage plus 25% of each sale, or am I well off the mark here?
    Click to expand...

    Yes, there is a 'bottom end' to the commission market, exemplified by MLM models, which I'm sure isn't where you want to be.

    There are many options, but I would look at a minimal basic with a platform before commission kicks in, but with a guaranteed minimum for, say 3 months.
     
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    estwig

    estwig

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  • #9
    I think your looking at this wrong, basic wage, what £20k, the rep will have his own good car, lappy, phone, good clothes and have his sh*t together. He probably won't be interested in working 9-5, more of a work when it suits, or when it's needed kinda guy. Tying someone who already has the tools to do this, to a 9-5 for £10.00 an hour plus a %, isn't going to appeal to the right person.

    Offer a commision and look for a rep who is already selling into your industry with a similar product, or even a completely different product in a different industry, but similar hours and similar location, travel time and lead generation time can be a killer. Then leave them to it, keep their own hours and do their own thing, don't try and manage someone who is already good at what they do.
     
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    A

    APW

  • #10
    I have decided to hedge my bets and offer 2 roles - 1 being a basic wage with commission and the second commission only but with a much greater commission rate.

    Where would be the best place to advertise commission only jobs?
     
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    C

    Chris Ashdown

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    • Dec 7, 2003
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  • #13
    What are you doing as a company to assist the sales person, in the old days the salesman would drive around and find a company or person who might use the product and sell to them with varying success

    In modern life you cannot afford to wast so much time so the salesperson need support so they only talk or visit preselected potential customers, Are you doing any marketing that brings in enquiries for them to follow up or do you have a focal point where potential customers come in and view like say a retail outlet or car showroom

    Cold calling is not a worthwhile use of a salesperson there days except a few opportunities to private addresses and which m,ost have now been done to death
     
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    Mark T Jones

    Mark T Jones

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  • #14
    Noah said:
    Isn't minimum wage a consideration with sales commission? My assumption is that whatever the commission level, it would have to be on top of minimum wage.
    Click to expand...

    My knowledge may be out of date, but when I recruited commission-only sales people you had to demonstrate the potential to earn minimum wage.

    I do know that some rrades like estare agency and car sales often pay minimum wage as a guaranteed minimum.
     
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    Inva

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  • #17
    Salesman with 20 years experience who knows everything about the product, and a junior who is just starting to learn, are working side by side. The former gets a client who is just browsing, the latter gets a client who is determined to buy. Who is the better salesman?

    I think judging by volume is a bit simplistic.
     
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