Has anyone ever worked a 100% commission job?

In My Humble Opinion
1

Ok…for whatever reason, the only type of job that seems to be available in NYC are these jobs that pay no or little base salary and 100% commission (100% of total salary is comission). Most of these are stockbroker, “financial advisor”, sales, or insurance sales jobs. Some of these jobs, you aren’t even an employee but a 1099 contractor with no benefits.

Basically, it goes something like this…I get a call from the recruiter to come to an interview but gives little or no detail about the job. The “interview” can be individual but more often than not it’s a group of candidates, kind of like Boiler Room but wearing Today’s Man suits and not as good looking. They tell you about all this money you will make and how its “entrepreneurial” and just like owning your own business. Of course it is just cold calling and no leads.

Here’s my take on the whole deal:

  1. I am not willing to take a job where it might take me months (if ever) to ever actually receive a paycheck.

  2. Cold calling and paying your own benefits is not the same as owning a business. A business owner has assets he can sell at the end of the day and has people who work for him.

  3. I’m suspicious of any job that hires by the dozen while other jobs are being downsized. I suspect that the turnover rate for these “churn and burn” jobs is very high but the companies need to maintain a certain minimum size sales force.
    So, has anyone ever actually worked in a job like this?

2

Frankly, if it was going to be “like owning your own business”, I’d just go ahead and open my own business.

3

I’

4

I’m working a full-commission job now, but the good points are:

  1. NO COLD CALLING. This is a huge point. There is a lead system with letters being sent to people. I only call people who send back a response that they took the time to fill out in their own handwriting.

  2. A very helpful management team.

  3. A real product that people actually need and is not a ripoff at all.
    It’s been tough for a while. I think the real key is the subconcious projection you give people. Acting confident without being pushy, and recommending only things that they need is very important. I could go geeky with more stuff we’ve been learning from a sales trainer, but I won’t put you through that.

5

Well, I’ve done drawing projects for commission before, but I guess that doesn’t really count.

6

It’s a function of small businesses that more and more companies are much smaller and can’t afford to hire ‘salesmen’. I am in such a situation and have offered such 100% commision jobs.
I don’t like the multiple person interview, I have only been to one and when the 2nd person walked in I almost walked out (this was many years ago). If you do take such a job where you are an independant contractor (or set up your own corp.) and have dealings with multiple clients drop me an email as you may be able to help me out as well.

7

I have worked in insurance sales for over 20 years.

What a lot of people don’t relies is we keep getting paid on policies we sold any time in the past.

It’s called renewals and that is what makes my life great.

Imagine selling 10 homeowners policies a month, say you make a $100 on each, that’s $1000 for the month. not much right?

Well next year when those 10 homes renew you may make $800 before you even start the first day of the month! Add to it the 10 new homes you write and you have $1800, not bad.
The next year you start the month off with $1600 and add you $1000 for $2600.

Do this for 10 years and you are rich, running an inflation proof business.

I work hard but take every Friday to be with my wife. My renewals are over 80% of my gross every year. Every year my income goes up.

I love my Job

8

Don’t fall for any company selling “management Consulting Services” on a 100% commission basis, particularly if the company recruits huge numbers of new salespeople. You will invariably find that it is a tough sell, and the company wants the 1-3% of the people they recruit, who are actually able to sell the services.

9

I worked for several years at an all-commission job. We earned “draw against commission”, which essentially meant that we got a small paycheck every week (IIRC, it was about $250.00, and this was about 12 years ago), and then when our commissions were totalled at the end of the month, our paychecks were deducted, and we received a check for the balance. It was a legit organization, selling medical videotapes to hospitals, clinics, etc. Each sales person had a designated “region” of the country. We did cold-call sometimes, but only to doctors offices, and cold-calling businesses is not nearly as stressful as cold-calling private homes.

It was a good job. In no month did I fail to make less commission than my draw paychecks had been for. I would have kept working there, but I had a second child, and the cost of putting a second one in daycare was prohibitive.

Good luck in your search.

10

I’m curious though. What is the typical earnings for a salesperson who has been in the business a year, 5, 10 years? What’s the turnover rate like?

I find it hard to believe that many of them are bringing in $300,000 a year like the companies claim.

I think the biggest turnoff for me is the fact that you don’t earn any money untill you get established. It’s bad enough learning a new job without having to worry about how the rent is going to get paid.

11

I’ve been in a 100% commission job as a commercial real estate salesperson since 1987. The first year was tough but real estate has been pretty good to me all things considered. The following mainly pertains to real estate, but most of it (not all) is true for other straight commission type jobs.

Negatives to straight commission income:

Income:

Income varies in direct correlation to the deals you do. If you can’t put deals together you’ll starve. The first year is often very tough and you need to have some cash set aside (or live with your parents) until the first commission checks start coming in.

Budgeting:

Dealing budget wise with a variable income is somewhat more complex than a guaranteed paycheck income. Establishing and maintaining impeccable credit is very important if you need some help to ride out the low spots in the wave (as I have 3-4 times over the years). Accounting requirements are also potentially more complex if you start to do substantial business. You will typically have no pension to fall back on when you retire.

Health benefits:

Typically there are few to no health or insurance benefits as part of the job (except if you sell health insurance :wink: ) . Health insurance will usually cost you substantially more as an individual vs. being in a wage or salaried worker plan. There are very high deductible plans available. I’m in one @ 2500 per person for my two kids and myself that’s $ 3200 year with zero claims made to date beyond the deductible. It does include a prescription card that is helpful in controlling the cost of drugs.

Relationship Strains:

Dealing with an up and down income can stress relationships. If your SO is not onboard with the nature and vagarities of a commission based income your life will potentially be quite difficult. Your SO has to have some substantial degree of faith in you and your ability to succeed and do well if a relationship is going to work in this context.

Personal demands and mental stability/ego demands:

You have to be on point, professional and responsible. Well paying sales jobs are quite demanding and require some degree of mental discipline. You have to be street smart enough to understand the goal of the process and how to get there. Well paying sales jobs are pretty unforgiving of long-term personal and emotional crises. If you don’t have some inner core of forged iron down deep in your personality that tells you “You are a winner and if you keep working you will succeed!” you might as well forget about pursuing a straight commission job.
Positives:

Freedom:

In many cases (not all) a straight commission sales job lets you define your own schedule. Direct oversight is often minimal. Your time is your own to use or squander as you see fit. In real terms you are your own boss to a large degree.

Job security:

So long as you can produce and are not convicted of malfeasance or an ethical violation you are essentially “fire” proof. If your firm tanks go across the street to the competition. Experienced, professional successful salespeople are pure gold. The only killer is if you are in an industry or profession where the direct sales model is being eliminated.

Income:

A successful professional salesperson in real estate or insurance or pharmaceuticals etc. can (and should) make fairly near or well above 6 figures in a reasonable sized market. You will need to smart about budgeting this, however, and set aside a prudent amount for retirement.

Education requirements:

This would have been a bigger plus in the past than it is now. Many of the more professional and well paying sales jobs are now looking for college degrees in the cases of pharmacy rep. and commercial real estate sales jobs. You can still get into residential real estate and most insurance jobs (not all) with a high school education.

Being plugged in:

Sales people are often on the front line of various deals and opportunities coming down the pike. In real estate sales various real estate investment and development deals will be landing on your door first. I’m sure professions like being a pharmaceutical representative or an insurance salesperson will have their own unique opportunities in getting in on the ground floor of various opportunities.

12

The turnover in most commission sales like insurance is huge. When I started we were in a meeting with about 50 new recruits in a room. The manager told two people to stand up he said this was the probable number of agents who would make it after 5 years.

If you can get a part time gig or if you are young and don’t need much money you make a good start in this field. But if you have to jump in and feed a family it can kill you.

Still it can be done.

If you are looking at a company ask them to let you talk to someone with two years in the trenches that is not related to an established person. They can give you the real scoop.

Because after 2 years you are either still excited or ready to quit.

13

I apologize mssmith537. In re-reading your OP you are asking about boiler room cold calling which is a somewhat different animal than the commissioned sales jobs I was referring to.

Per the OP I would not suggest getting involved with a boiler room operation. You might make some money in the short term but other sales professions have better growth opportunities and less headaches.

14

I was out of work for seven weeks, looking in NYC,and misspent a whole bunch of time at these boiler room type things. Keep looking, IMHO.

15

Actually your info was helpful.

Did you find a job in NYC or did you look elsewhere? What industry?

16

I found a job in NYC via Craig’s List . I’m in the legal field.

17

MSmith 537,

There is a difference between working on straight commission and being in business for yourself. When you work on straight commission for a company… they, not you, determine the amount of the commission. When you truly work for yourself, you determine the amount of mark-up or commission you make.

For example; Network marketing companies tell you that you are in business for yourself. That is true when it comes to all the downside aspects. When someone else or a company tells you that you what you make per sale, then you work for them. They can also fire or release you from your contract, if you do not meet their terms. You have little control.

Look at all the times these Network Marketing companies and non network marketing companies change commission schedules. When you really work for yourself, you can not be fired or have your contract cancelled. You determine the amount you make per sale because you are truly the boss. You have to take financial responsibility for the product, if your are a reseller, and that is the price. But it is worth it. Whether selling financial products, network multi-level sales, or working on straight commission as a 1099 employee, you are not independent, and generally have signed a one sided agreement, that they can dismiss you, if they really want to.

This is America. The American dream is not owning a house, It is owning your own business. It is a dream for the average man, that does not have a Harvard Education to get him the really high paying jobs.

As others have told you…Companies that have sales people are stopping salary plus commission jobs to save money. They pay you more commission because they have too. They call you a salesperson, but you are really a marketing person. Real salespeople put their efforts into selling, not prospecting. Real companies do marketing, generate leads for their salespeople, and invest in them. You are just as much an employee, working on straight commission, as you are with the all benefits. Don’t let anyone fool you.

18

I have worked at a zombie-only commission job before.

19

How does cold calling with no leads work? Do you just dial random numbers?

If you’re out of work anyway, maybe you can make the most of the situation. Take the job and maybe you’ll get a few sales. If the client isn’t interested, ask them for a job.

“Hi! This is Mr. Smith. Would you be interested in some X widgets?.. No? Ok. Well, do you know of any job openings right now?”

20

If you’re an experienced salesmen with experience and contacts in that industry, a 100% commission job may be the way to go as you won’t be limited as to how much you make.

If you’re not, expect to be broke and disenchanted with the position in about 3 weeks (if that long).