Commission only sales job a good idea?

[amber1]

Hi, okay here is the deal. I am interviewing with a good, somewhat large company for an outside sales position that is commission only. Supposedly they pay an hourly rate for the first 3 months while I will be setting up my territory but after that it goes to straight commission (that being 10% of every sale). I do have some money saved up, not that much, but enough to last me a little while. My bills include a big car payment, health insurance, rent, and a graduate school loan to pay off. Would taking a commission only sales job be a good or bad idea? It is in an industry that I would be comfortable about working in and selling the products. Any input is appreciated. Thanks!

[Teacher's Pet]

I once did a commission-only job.

 

You know the expression, "feast or famine"? That basically sums it up.

 

I had weeks where I made $1K, I had weeks where I made $200.

 

If you are willing to go in, give 150% of yourself EVERY DAY, and are committed to the product/service you are offering, you might just have a shot.

 

Good luck!

 

-tp

is now a bartender, basically commission only.

[SoHotZanzibar]

When I put myself through graduate school, I worked commission only and yes, you reap what you sow! You really have to believe in yourself and be GOOD!

[amber1]

Thanks for the replies. It is in an industry that I am really familiar with and I think I have the passion to do well. I haven't heard anything back from the people I interviewed with yet. I interviewed last Thursday. If I don't hear anything soon is it a good idea to call them to get an update? If so, how long should I wait before calling? Thanks!

[disgracian]

If the hourly rate for the first three months is decent then you have little to lose by giving it a try. If after those three months you calculate that you won't make enough on commission only, then hang up your walking shoes and try for something else.

 

Furthermore, it's easier to get a job when you're already employed. Funny old world...

 

Cheers,

D.

[Trimmer]

Just some questions that come to my mind:

 

Will you be working for a sales company, repping a whole line card of different manufacturers (diversity...) or working directly as a sales rep for a single manufacturer?

 

Will you be an employee, or will you be considered an outside contractor? From your perspective, this will determine the difference between whether you are "employed" (by the company) or "self-employed." Being a self-employed "outside rep" is not necessarily bad, but it involves some considerations that you should prepare for (accounting, licensing, taxes, providing your own benefits like health insurance and pension savings, etc....)

 

If you are going to be a self-employed outside rep, does this company place limitations on your ability to take on other lines of products in the future, if you decide to expand your line card? They certainly would probably not allow you to rep directly competitive products, but as an outside rep, you could potentially expand your product line with related but non-competitive products. As a simple example, if your principal product line is cameras, you might add lens-cleaning supplies from another company to your line card, if your principal company does not sell those...

 

Is all your travel paid in full, are you given a budget, or do you have to pay your own travel out of your commission? Are you provided office space and administrative support (fax & copy machines, conference rooms and presentation facilities...) or do you have to provide your own office? Again, if you provide your own, it's not necessarily bad at all, but do they provide a budget for this, or does this also come out of your commission? In general, what do they pay for and provide, and what will you need (office? vehicle? travel expenses?) that you will be expected to finance?

 

Does your company already have a presence in your proposed territory? In other words, are you effectively replacing an existing sales rep, or are you trying to break this company's products into a new territory?

 

Along those lines, have you analyzed your company's market share (if any) relative to competitive products already established in the territory?

 

Are you going to be selling products with an existing "market awareness" or are you trying to establish a market for newly developed products?

 

What are your company's advertising policies and practices - do they advertise in appropriate trade journals, or whatever vehicles address your market? Do they collect and distribute leads garnered from their centralized advertising? Can they give you statistics on their advertising, lead distribution, etc...

 

If "corporate" gets a direct call out of your territory, do they sell direct, or pass the lead down to you (they'd better pass it down, or at a minimum, pay you commission on any direct sales in your territory...)

 

Are you selling "B-2-B" (e.g. medical supplies, electronic components, industrial raw materials...), selling to retailers (e.g. products that will go on store shelves for purchase by consumers) or selling directly to consumers (e.g. door-to-door vacuum cleaners, or smoothie blenders at home shows, etc...) How "elastic" is the market for your products, i.e. how significantly will an economic downturn - either across the board, or one specifically in your industry - affect demand?

 

What kind of training and orientation does the company provide to you for their products, services, policies, and procedures, to get you up to speed quickly? Do they have recurring sales meetings where you can meet with other reps and sales managers to work out difficulties and get information and training on new products?

 

Who provides direct customer support? If a customer has a support problem, are you expected to handle that completely on your own, to provide "first tier" support before kicking it up to your company support personnel, or does the company have a support staff separate from the sales staff that provides all support? If you are expected to provide some level of post-sale support, you need to factor this in as an important part of your time...

 

I don't necessarily have "right answers" to these, but I just thought you should consider questions like these as a natural part of your thought process. Apologies if these issues all seem obvious. If they are not, and you want to talk in more detail, feel free to PM me. I don't do sales for a living, but I have some experience working around sales reps.

[amber1]

disgracian, the hourly rate is still to be determined but they will keep my past pay in mind.

 

Trimmer, you have made me feel more confident about the job opportunity although I don't know the answers to some of those questions. You did make me think about some of the things I hadn't already considered. To the ones I do know the answers:

 

I will be working for a company that sells products from many different manufacturers. It is a distributor of professional salon haircare products.

 

As far as I know, I will be an employee for the company.

 

I don't know if travel, administrative support, etc is paid for.

 

The company is the largest distributor for the industry's products in the state I live in and have presence in about 8-10 other states and one other country. They have a few smaller in state competitors but I think this company is more well known than the others. I think I would be a sales rep in a new territory but the company is well-known and trusted throughout the state. There are existing accounts that I would maintain as well as cold-calling on new accounts. I would have to visit around 10-15 accounts a day, new and existing. The company has around 350 sales reps total.

 

As far as advertising the company has trade shows a few times a year and they have their own distributor stores and an industry magazine. I don't know how they gather leads.

 

I agree. I certainly hope that they pass the direct sales that come out of my territory to me lol. I have also worked around sales reps in the past and the company that I worked for did that for them and it helped save their a**es some days lol.

 

I would be selling to salons in a territory so the products would be going on retail shelves that in turn are sold to customers and for stylists to use within the salons on the customers.

 

As for training, at first I will go out into the territory with my manager and watch him. I'm not sure about the other training. I know there are sales meetings several times a year.

 

There is customer support at the corporate headquarters but as far as I know I will have to provide customer support if it is something I can easily do. As for large damages, unexpected delays in shipping, etc. I or they would probably have to get in touch with corporate for that sort of issue.

 

So after all of that information, do you think it would be a good idea to take this job?

 

Thanks for your help!

[Cobra_X30]

I work in outside sales. There are a couple of questions you need to ask before you jump on this.

 

1. What has the territory been worth in the past? If its a new territory, and it sounds like it is, the first year is going to be tough!

 

2. What are the territory boundaries? In other words, are you going to wind up sharing your territory with other reps from your company.

 

These two questions help you determine what your income can be!

[amber1]

When it comes to the territory, as far as I know they are looking to place someone in a territory that one person is in right now but the territory is supposedly so big that they are going to divide the territory in half. So that person would get one section of the territory and I would get the other. I honestly don't know how many existing or new accounts exist in the territory though.

 

I keep hearing over and over again that it is all about building good relationships with the businesses. I feel like I could do a good job at that, but since I have never done this line of work before I can only guess.