Commission only sales reps

Very difficult to attract and keep qualified candidates. Those who can do the job are already being well paid to do it.

I've set up an agency for a management consulting firm, and it took 3 rounds of advertising & interviewing before I found ONE candidate who would stick with it past an hour. The rest were lousy candidates: unemployed psychiatrists, stay-at-home moms...people with no skill and no stick-to-it-iveness. I even gave away my training to those who signed up (admittedly, this was well before my current programs...about 3 years ago now). They were looking for easy money, and telemarketing ain't it.

I help companies that hire home-based telemarketers now and we concentrate most on the screening process. It's the reverse of what everyone else is doing (hire all the people who apply, and let them sort themselves out--it's paperwork nightmare and such a waste of time that way).

I would not recommend you go forward this way. Instead, get $100 and spend $10/hr on someone you can monitor. That was John Durham's suggestion and after all the experience I've had I agree fully with it. You can't expect full commitment from someone who's on 100% commission with an unproven company.

And screen, screen, screen your candidates. Don't waste your time with anyone who doesn't have proven experience succeeding with self-motivated phone sales. If they haven't done the work at home themselves before, even if they've been an inside salesperson, it's unlikely they'll have the discipline to stick with it now.

Hey Jason,

Just a quick observation - sincere question - why are stay-at-home moms lousy job candidates?

Tom

I run an office with commission only staff... YOU have to be able to sell very well if you expect people to stay... and you need to get people selling ASAP so others can see that it can be done.

Hi Imperetse,

I'll throw my 2 cents in here and take it for what it's worth. To give you an idea of my perspective, I have been a sales rep for 20 years or so, it's been my career since college. I come to the Warrior Forum looking for ways to supplement or replace my current job. While I am no Claude Whitacre or Jason Kannigan, I have made a fairly good living in sales, being at or near six figures for the last 15 years. Most of my career I have been paid on straight commission, I prefer it that way.

Jason is dead on about it being hard to find good commissioned sales people, most are already in a good job. So now you are in the position of trying to lure them away.

So, if there is one piece of advice I can offer you and anyone reading this thread, it's this: If you are going to pay only on commission, then offer a healthy commission. If your margins are such that you can't offer a big upfront commission then you better offer volume potential or recurring commissions. The bottom line is the bottom line, everyone works for money. Good sales reps in particular work for money, that's why they are good and why they are in sales. We can talk about loyalty and good benefits, but ultimately it boils down to what the opportunity is.

Now many of you are thinking, " thanks for stating the obvious". But the reason I felt compelled to post here is because I routinely see threads and posts from people who want to hire "good" reps but don't want to pay. You get what you pay for.

I did some side work last year for a local guy who built mobile sites, hence my name here. He was tech savvy and using a mobile site builder along with some customization so it only took him an hour or so to build some nice looking sites. Originally, he wanted to pay me 10% of the total sale. I politely declined and asked him how much he wanted to make on each site based on the time it took to build the site. We agreed on my cost being essentially $200 for the first hour and $75 for every hour after. I was selling the sites for anywhere from $399 on up, usually up. He handled the payment (because all i want to do is sell) and he was frustrated that I was making more money than he was on most of the sites. We did an ecommerce site that "cost" $575 to build and I sold it for $1950. He only paid me $975 on the deal because he felt that half was fair on such a big deal. That was the end of our relationship. We had an agreement and he broke it.

I had another guy want me to sell $700 monthly SEO packages for 10% commission. I counter offered but he refused. I knew he was reselling the SEO and his cost on the packages was about $200 so he had room to move. Regardless of his cost, I wasn't going to chase a $700 monthly SEO sale for $70 bucks, even recurring. I'm not trying to sound arrogant, my point is there were better sales opportunities available.

I think some entrepreneurs come in to the WF ( and in the offline world) without much knowledge of sales and sales people. They think that 10% is enough and standard pay rate because they heard or saw it somewhere, without much thought to the whole context of what they are selling. I would be EXTACTIC to earn 10% from my current job, I earn nowhere near that. But I sell about $200,000 per month of product. I know that I am making the company good money but it is the agreement I made and I have yet to find something better ( that's why I am on here). But 5 or 10% on some products or niches just won't cut it.

One other thing to remember. When you are trying to get good sales people, you are not just competing with other Internet marketers, you are competing with completely other industries, like manufacturing. So while you might pay the best commission in the world for selling a mobile app, it might not be as much as Claude Whitacre can make selling vacuums. Sales is a transient profession.

Anyway, I hope I reinforced a point I have seen made on here before by sales reps who are better than I am. If you want good reps pay'em well.

Jason,

You're right - that is really interesting. If we were discussing this over a beer, I'd ask how you got from BC to NC...

Tom

My apologies Jason. I am Irish so I must have done it subconsciously

Nevertheless, it was an error my part. Had Jason been a potential client, my mistake may have been enough to turn him off. What's the old saying, "it's in the details...."

I have been one for many companies with success along with hired many to work for me some good and some bad .. You have to give a lot of incentives to make the relationship work ...
What I would do is run contest amongst the salesmen every Friday one of them was a all round trip for the weekend to the Bahamas with a extra $500 to gamble with for whoever wrote the most deals all week ..

Doing stuff like this was always a big hit for everyone involved ...

I personally have not done this but I heard of many people who were successful by hiring commission only sales people

I hire commissioned based sales people all the time, mostly because I have to replace the ones who do not work... My best results come from the paid ads on CL. Never the free ones; they have been a waste for time for me.

And yes you have to protect your business. I keep my resources secret as much as I can and so far as I can tell no one has run off and started my business model themselves. And if they have so what? I have thousands of competing businesses anyway.

But when pressed by an aggressive sales rep about my main outsourcer I just said a "personal friend" that I have known since grade school in hopes they would not try locate them and start their own business.

When negotiating commission pay it has helped me to disclose my costs and even my profit margin (I am not 100% upfront with my cut but generalize) to the potential sales rep. Then I tell them that they will get the lion's share of the profits for sales. I don't do SEO, etc so my margins are much smaller. This way they don't feel they are being taken advantage of and understand what you are trying to accomplish.

Also, I give lifetime/recurring commissions as long as they are an active sales rep for me and as long as they are making at least one sale a month. If they fail at either then they forfeit their recurring commissions from past sales.