Pros & Cons of Commission Only Sales Rep

At GRC Executive, we understand how important it is to make the right decisions when it comes to hiring Commission Sales Representatives. While there are many potential benefits, there can also be significant downsides that should be weighed carefully before making a decision. In this blog, we will take a closer look at the pros and cons of hiring Commission Sales Representatives.

The primary benefit of commission-only salespeople is that they are incentivized to generate revenue, which is often better than a salaried salesperson who is “just” working towards a target. But if that’s the only benefit, it could be a red flag.

In my experience, commission-only salespeople can be an effective way to fill the gap between zero sales and having enough revenue to hire a salaried salesperson. But they come with an inherent risk that could be detrimental to your business if not managed properly.

The risks of commission-only sales include:

  • Poorly defined expectations: If a salesperson isn’t given clear expectations, it’s hard to hold them accountable for their performance.
  • Lack of motivation: Without a salary, commission-only salespeople may not be motivated to continually work on your behalf, or stay with your agency for the long haul.
  • Over-promising: Without the right incentives and controls, commission-only salespeople may promise more than they can deliver.
  • Unscrupulous tactics: Commission-only salespeople can be tempted to manipulate the sales process, or even cheat the system.

That said, when managed effectively, commission-only salespeople can be a great fit for your business.

Here are some tips to help you maximize the benefits and minimize the risks of commission-only salespeople:

  • Set clear expectations: Make sure that everyone—from the salesperson to the decision-makers in your organization—understands the sales process and what’s expected of each party.
  • Develop strong incentives: Make sure that salespeople are incentivized to exceed their goals and stay with your organization for the long haul.
  • Build a sales culture: Invest in onboarding and training to help your commission-only salespeople understand your company’s sales process and culture.
  • Monitor performance: Regularly review sales results to ensure that expectations are being met. 

Commission-only sales can be a great fit for your business—if you get it right. With the right expectations, incentives, and monitoring in place, you can leverage the primary benefit of commission-only salespeople—their incentive to generate revenue—while avoiding the risks.