What Should I Know About Hiring Sales Reps on Commission Only?

By Grit Daily Staff Grit Daily Staff has been verified by Muck Rack's editorial team
Published on March 20, 2023

From observing fair legal practices to ensuring candidates can deliver results, here are 12 answers to the question, “What is your advice for hiring sales reps on commission only?”

  • Seek Legal Advice
  • Ensure They Have the Information They Need
  • Solidify Your Sales Lead Funnel
  • Look for Self-Motivated and Driven Candidates
  • Offer a Fair Commission Rate
  • Use a Performance-Based Competition Model
  • Look for Motivated and Inexperienced Candidates
  • Give Them Flexibility
  • Set Clear and Realistic Expectations
  • Have an Understandable Commission Structure in Place
  • Evaluate Their Success Track Record Carefully

Seek Legal Advice

Before you employ someone on a commission-only basis, it is important to consider working with a legal counsel to ensure you observe fair legal practices.

Disputes over commissions are common, so be sure that the employee is aware of the terms and conditions. They need to know the calculations of their commission and when to expect payment.

Salespeople are one of the top components of your company. Nurture them and they will provide you with a favorable return on investment.

Paw Vej, COO, Financer.com

Ensure They Have the Information They Need

This is because a sales rep who understands the product they’re selling and the audience they’re trying to reach is more likely to close deals and earn commissions.

Provide clear and realistic expectations for the commission structure, target market, product functionality, and ideal customer characteristics. You can provide this information through training sessions, product demonstrations, and one-on-one meetings with a sales representative.

Aside from that, this will also help create a supportive and productive work environment, leading to increased success and motivation for the sales reps on commission.

Johannes Larsson, Founder and CEO, Johannes Larsson

Solidify Your Sales Lead Funnel

Absolutely, having a solid sales lead funnel is essential before hiring sales reps on a commission-only basis.

Without a well-established sales lead funnel that shows the numbers work, it can be difficult for sales reps to generate the leads necessary to close sales and earn commissions, which can lead to a high turnover rate and a negative impact on your company’s reputation.

Brian Hawkins, Marketing Manager, GhostBed

Look for Self-Motivated and Driven Candidates

When hiring commission-only sales reps, it’s crucial to find individuals who are self-motivated, driven, and have a strong work ethic. They must have the ability to handle their time effectively, prioritize tasks, and have the discipline to prospect, follow up, and close deals on their own.

Look for candidates who are highly competitive, results-driven, and have a passion for sales. These traits will help ensure they are successful in a commission-only role and motivated to exceed their targets.

During the interview process, ask open-ended questions that allow you to assess their level of self-motivation, such as “Tell me about a time when you had to work hard to achieve a goal” or “What motivates you to succeed in sales?”

Beth Worthy, President, GMR Transcription

Offer a Fair Commission Rate

Commission-only sales can be an attractive option for motivated and ambitious reps, but they need to know that the rate of return is fair. Do your research and make sure that you are offering a rate that will incentivize your sales reps to perform their best.

It’s also important to ensure that there are no hidden fees or extra costs associated with their commission payouts.

Steve Rose, CEO, Money Transfers

Use a Performance-Based Competition Model

Hiring sales reps on commission can be a tricky endeavor. A unique approach is to turn the hiring process into a challenge.

For example, rather than having sales reps actively apply for jobs, establish a competition in which potential employees must complete tasks and prove their capability for the successful closure of mock deals.

Give those who are successful an offer they cannot refuse and incentivize them with attractive pay-out options. This creativity will give you access to exceptional talent that was not actively looking or had not applied before, creating fresh opportunities for your business.

Grace He, People and Culture Director, Team Building

Look for Motivated and Inexperienced Candidates

Try hiring younger candidates with little to no experience. Commission-only jobs can be difficult, especially if your candidate has previous sales experience that was more than commission-based.

Alternatively, hiring someone with no experience in sales will allow the candidate to show you their full potential. In addition, thanks to their age, they’re more likely to have the energy it takes to work a commission-only sales job. When hiring for sales, look for energy, youth, and inexperience.

Bryan Jones, CEO, Truckbase

Give Them Flexibility

Flexibility is key to keeping turnover low during tough months. For commission pay, what incentive is there for reps to stay if the pay decreases compared to previous months?

Give them the opportunity to make their own schedule, while providing them with quotas or benchmarks to keep them on track. This flexibility offers workers a work-life balance, which is valuable even when pay is a little lower for a period.

Bridget Reed, Co-Founder and VP of Content, The Word Counter

Set Clear and Realistic Expectations

It’s important to make sure that your expectations for commission-only sales reps are realistic, measurable, and achievable. Make sure that they understand exactly what you expect of them in terms of performance and goals.

Explain clearly how you calculate their commission to prevent confusion. Finally, outline any additional incentives or rewards that will be available for reaching certain benchmarks.

Having a well-defined set of expectations upfront will help ensure everyone is on the same page.

Matt Teifke, CEO, Teifke Real Estate

Have an Understandable Commission Structure in Place

When hiring sales reps on commission only, one of the most important pieces of advice is to ensure you have a clear and concise commission structure in place. This should include the base rate and any potential bonuses or additional incentives, as well as the criteria needed to receive them.

It’s important to have a comprehensive onboarding and training program in place so that new hires have the skills and knowledge they need to succeed in the role.

Finally, it’s essential to do a regular review of your sales reps’ performance and adjust the commission structure accordingly. Doing so will motivate your team so they can stay successful in the long term.

Ray Schultz, VP of Marketing, Liquid Rubber

Evaluate Their Success Track Record Carefully

Hiring sales reps on commission-only can be a great way to build a sales team while minimizing fixed costs. Ensure that you are recruiting motivated candidates who can deliver results.

My one piece of advice for hiring sales reps on commission-only is to evaluate their track record of success carefully. Look for candidates who can provide concrete examples of how they have generated leads, closed deals, and exceeded their sales targets.

Consider offering a base salary or drawing against the commission to help attract top talent and give them the financial stability to focus on building a pipeline of sales opportunities.

Make sure the commission structure is clear and competitive, and that reps have a realistic earning potential based on your business model and sales cycle. Finally, provide ongoing training and support to help your sales team succeed and reach their full potential.

Matthew J Rodgers, President and Founder, iprospectcheck

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