In the sales industry, one of the most heated topics of discussion is commission sales vs. salary sales. There are benefits to using both, but many people are hard-core advocates of one or the other. Some people believe commission is the only method of payment for true salespeople, while others would like to see a balance between the two. If you are trying to figure out which payment method to use in your company, there are things to consider. When it comes down to it, though, it really is a matter of preference. Although both have advantages and disadvantages, they are fairly equal.
When discussing commission sales vs. salary sales, it is important to take into consideration your employees. Would they be offended if you only offered them commission? Some people take this as a sign you don’t want to pay them the money they deserve. People may be afraid to sign on with your company because they won’t make any or enough money. On the other hand, there are some people who see commission sales as a challenge. They have to close as many deals as they can in order to get a paycheck. They don’t consider it stressful or worrisome, but rather a competition to see how well they can perform.
If you choose salary sales in the commission sales vs. salary sales debate, you might have a greater number of people join your company. They see this as sort of a guarantee they will get some sort of payment. Even if the salary is low, it could be enough to sway employees. When using salary in sales, it is important to have a good balance between salary and commission. Many companies that offer salespeople salaries also offer them commission if they exceed their quote. How much are you willing to pay exceptional employees? You have to consider all the angles.
When you think about commission sales vs. salary sales from a business owner’s standpoint, it can be tempting to offer commission especially in the current economic recession. You can use it as an area in which you can save money. Although this is enticing, you still have to be considerate of your employees’ needs and wants. If the majority of your employees would prefer to have both a salary and commission, it is a good idea to agree on a common source. If your employees are old school salespeople, they probably only will work for commission. Ask your employees what they would prefer. This also lets them know that you actually care about their thoughts and feelings.
There is no right answer for the commission sales vs. salary sales debate because every company is different. Its employees may prefer one greatly over the other. If this is the case, go with what the masses want. If you only are worried about what your company can afford, then you need to examine how much it would cost your company to use both methods and choose the one that is more economical.