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Why 100% Commission Isn't Out of Style for eTailer Vendors

By Darren Pierce on May 27, 2013 6:00:00 AM

People are always curious about the salaries of professional athletes.

We hear all the stories about athletes making millions in salary, bonuses, and endorsements.

The one sport (or game if you want to get technical) that always intrigued me was professional golf.

Unlike football, basketball, and baseball, professional golfers are paid for performance.

If a golfer misses a cut on the PGA Tour they receive no compensation. If they make the cut and finish 25th they receive the appropriate compensation. If they win the tournament they receive the biggest prize.

Talk about pressure…

The PGA Tour is set up in a similar fashion to 100% commission-based eTailer vendors. These are the companies that compensate their sales teams based entirely on performance.

There is a lot of pressure, but in the end, the best people rise to the top.

The Case for 100% Commission for eTailer Vendors

It’s a tricky situation to offer commission and salary to your sales team.

Some companies prefer to offer a competitive salary. Others opt for all commission and others opt for a mixed model with a salary and commission.

In my experience working with eCommerce vendors, I’ve seen the most success with companies that offer heavily commission-based compensation models.

The 100% commission models bring out the best salespeople. They are focused on results and the model aligns company goals (more clients) with the salesperson’s goals (more money).

Reasons Companies Offer Sales Salaries

Obviously, there is a demand for salaried sales positions otherwise companies wouldn’t offer them.

The first reason eTailer vendors offer salaried sales positions is to attract the best salespeople. It’s hard to find quality people in the workforce today so you have to sweeten the pot. A guaranteed salary is a great offer for the employee, but not necessarily for the vendor.

The second reason an eTailer vendor might offer a salary would be to offer some stability for employees. This might be part of the company culture.

Commission Attracts The Right Kind of Salesperson

The right salesperson is driven to succeed. These salespeople love connecting with an eTailer company and working through the funnel to the eventual sale.

Salespeople that work on 100% commission like being pushed to succeed. Even as they accumulate money for themselves they still feel the push to succeed.

It’s not like professional golfers stop playing once they accumulate wealth. They’re driven by the challenge knowing that if they don’t perform they won’t feel satisfied.

In your company, consider 100% commission. It’s a simple model for your sales team to understand.

As time goes by, the best of the best will rise to the top.

Those salespeople will succeed and so will your company.

Make the setup easy to understand. Align the motivations of the salespeople with the goals of the company.

With the team working toward the same goal your company will succeed and your best people will be extremely happy with their career.

Written by Darren Pierce

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