Some people work on commission only
Close your eyes and imagine having a job in which your income is totally based on commissions.
This is a job where your income needed to support yourself and your family is solely based on your sales results and you only get a paycheck if you close a sale. Stock brokers, real estate agents, literary agents, loan officers and insurance agents are some of the most common careers in which income is paid entirely by commission.
Real estate agents are independent contractors and responsible for most of their expenses, medical insurance and self-employment tax for their social security. Some of the other careers mentioned above are W-2 employees that receive benefits such as expense reimbursement and medical insurance along with 401k plans.
However, everyone in the businesses that pay commission-only compensation know that if the employee doesn’t make enough sales, the person needs to move on and out.
The pressure is extreme when a salesperson doesn’t have enough cash reserves or other income to survive the downturns and disappointments.
Imagine being a parent, working 50 hours in a week with a buyer of your product and then the buyer decides not to buy. The salesperson may have missed their kid’s little league game or even something bigger such as their child’s first step during those 50 hours and after this investment of time receives no compensation to justify the sacrifice.
It takes tenacity and thick skin to be successful on commission only. It also helps to have plenty of cash reserves or, better yet, a spouse that makes a big income to offset the ups and downs that happen to even the best salespeople.
This column isn’t about how to be successful on commission only because that would require a 20,000-word workbook and instruction manual. This is about explaining how it feels to get up every day and go to work knowing that there is no guarantee of income for your family.
Most people might say a person would have to be a little bit crazy to take this leap of faith and take this risk. My response is simple: Every job in America that counts on customers to buy their product is dependent on the customer.
If a person’s income is based on a guaranteed salary plus benefits and maybe bonuses and people stop buying their product, their income and their job will end soon. The difference between this type of job and a commission-only job is simply time.
On commission only the pain is sudden when the salesperson has a couple of bad months with little or no income and when salaried people have a few bad months or they see their market changing, they have more time to react and find another job.
An example of this might be a J.C. Penney’s or Macy’s manager whose income is 60 percent salary and 40 percent bonus based on sales and profits.
Just Google the stock price performances over the past few Amazon years of these retail giants in the country today and just imagine how their salespeople might be feeling right about now.
I proclaim this “be nice to salespeople week.” Hug your hardworking salesperson, we need it!
