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Some aspects negotiable in commission-pay jobs
If you're thinking about taking a sales job, you may be wondering how you'll come out, in terms of pay. That's hard to know until you try, but you can negotiate some terms before you sign on. The following are five key areas to consider before taking a commission-based sales position.
Base/salary/draw
Even jobs that are 100 percent commission may include a consistent base amount paid to the salesperson every week or month. The employer's plan is for your commissions eventually to cover the base and more; if they don't, you'll be let go. A draw against future commissions is a variation on this theme. Sales jobs that are not entirely commission-based will pay a modest salary. Why modest? Because if the salesperson is not kept hungry, the thinking goes, sales won't be made. Key points to negotiate in this arena include the dollar amounts involved as well as timelines ("How long can I stay on the payroll if I'm not making sales?"). But be warned: Because you're supposed to make a fabulous living off commissions, protracted conversations about raising the base pay could be interpreted as a lack of self-confidence in your sales abilities.
Commission and bonus
How much commission will you earn on each sale? Based on what? (For example, sales contracts signed or customer payments collected?) How quickly will you be paid after the sale? And what happens when you blow the quota away? This may seem like an ambitious question to ask in an interview, but any veteran salesperson can tell you: The minute the salespeople begin exceeding their quotas, management begins to tinker with the commission formula. You may not be able to stop this tendency, but you can ask for bonuses or other rewards for sales that exceed the quota. If you're new to professional selling, get some advice from seasoned veterans before negotiating on this point. If you have some experience here, think back to all the sales jobs you've had and take an inventory: What were the best commission programs? The worst? Use the data to steer your negotiations.
Expense account and tools
Before you take any sales job, find out what the company provides its people. Mileage and travel expenses are the bare minimum. What about a cellphone, laptop and company credit card? (Run away quickly if the company asks you to use your own card and be reimbursed. After more than a year, one person I know still is waiting to be repaid several thousands of dollars from the now-bankrupt company.) While you're negotiating these points, don't forget your professional-development needs. Conference registrations, industry magazine subscriptions, work-related seminars and memberships to professional associations are all reasonable expenses for the professional salesperson. Similarly, the company should have its own program to train sales staff on all its products and services. If it doesn't, this might not be a good company to sell for.
Territory and leads
Are you opening a new territory or inheriting one that is already developed? Since you are being hired to fill a specific need, you may have little success negotiating this point. Nevertheless, try to ensure that the sales goals match the situation. For example, a territory that is already developed may yield relatively few new customers per month, compared with a brand-new area. If your commission is based on new customers, you could be hurting. On the other hand, if you have a new territory and commissions are based on gross sales, you also could run into trouble, as new customers tend to start with small orders.
Company support
OK, you know what you're selling and to whom. What happens after the sale? Can you be sure the product will be delivered, on time and as agreed? If service is part of the sale, will your company stand behind your promise to the customer? This is not really an area for negotiation, but it will be critical to your success. Before agreeing to put your name on the line to represent a company to the rest of the world, examine that company's reputation. Check with the Better Business Bureau, current and former salespeople, and customers, if you can reach them. If this sounds like a lot of work, consider this: You're about to agree to work for free. Don't you want to know that it's all going to be worth it in the end?
- Amy Lindgren owns Prototype Career Service, a career consulting firm in St. Paul, Minn. She can be reached at alindgren@prototypecareerservice.com or at 1071 W. Seventh St., St. Paul, MN 55102.
