Over the last several months I have worked with companies with anywhere from 1 to 6 sales people on staff. Many of these salespeople were being paid a salary in one form or another, such as a salary plus commission or by the hour.

If you have sales people working for you, their job is to bring in as much good, profitable work as they can sell. If you are paying them anything other than straight commission, where is the motivation to sell? There isn’t one.

I have been in at least three different construction company offices in the last two months and no one from the sales staff showed up to work until 9 – 9:30 am. For heaven’s sakes, the day is shot by then! Construction begins at 6 – 6:30 am, not the middle of the day. Sales people should be in early to check with production on how their jobs are progressing, review time frames for potential new jobs, make calls to subs and suppliers and to catch potential clients before they leave for work.

Granted some or all of this can be done from home, but do you think it is getting done?

Straight commission removes all the stories, excuses, rationalizations, B.S. and hoorah that sales people can generate for reasons they are not selling.

Want to take this one step farther? I think the company owners should be on straight commission as well. They should be paid on what is sold, built and collected each month. Again, that gets rid of the excuses and stories about how bad the economy is.

I’m not saying this to encourage business owners to save money by underpaying their sales staff. I’m saying this because I’ve been a salesperson for years, and I know that:

  1. the best sales people work on commission only, and
  2. sales people work best on commission only.

If you have a good sales person selling on commission only, you’ll be paying them far more than their current salary. And they’ll be making far more sales. The good ones in this business are always looking for a challenge. If you are on straight commission, you are going to get the job done or you and your family don’t eat. That’s a challenge. And it’s a marvelous opportunity, because the more you sell, the more money you make.

We discuss paying salespeople in our book, Profitable Sales, A Contractor’s Guide.

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sales recruiter network
sales recruiter network
February 16, 2021 11:02 am

Indeed sales and Marketing should be paid commission and salary. they should be fairly compensated base on their hardwood.

tony lett
tony lett
June 11, 2018 3:24 pm

Sounds like the same claptrap that you hear all the time that does not work in the real world. First of all there is a serious shortage of salespeople. Bad salesmen with experience command salaries that can approach six figures. Good salespeople rarely hit the market. Their current organizations bend over backwards to keep them. So exactly who are you going to hire that is willing to work for free? You will spend more time trying to find someone than it would cost to pay a base and hire someone already. But let’s pretend that you find a good salesperson… Read more »

Rick
Rick
October 8, 2015 12:54 pm

It was proposed to me that commissions paid on gross profit could also be deducted from commissions owed on looser jobs. I am not in control of the estimators and if they missed sq footage or large structural components, that could penalize my commissions due. Is that legal? Where is the motivation in that proposal?

Dave Marciniak
Dave Marciniak
November 9, 2011 1:29 pm

Michael, I’ll agree but with a caveat: if you’re going to pay straight commission and you hire someone who is hungry and good at sales, make certain that you can build what they sell in a timely manner! I was commission sales for a landscape company that just kept getting farther and farther behind, and it was disheartening to watch my projects languish for months, especially when the cancellations started coming.

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