Sales consultants are often paid on a commission basis, an amount based on a percentage of their sales. Whether for a position in an electronics or furniture store, or even on the road, what are the advantages and disadvantages of a commission salary?
The advantage of a commission salary is simple – the more you work, the more money you make. And the opposite is also true.
In this employment sector, which hires a predominantly female workforce (53%), working on commission provides greater freedom in terms of individual needs and work-family balance, according to the most recent sectoral study by Détail Québec.
However, people paid on their sales have to assume a share of the risks, which often leads to a high turnover rate. Cash receipts can fluctuate greatly from one month to another, and a lot of effort has to be put in to maintain them so they are advantageous.
Salary and commission
A combination of the two pay modes exists in the retail trade – a base salary to which a commission on sales is added, the percentage of which can be changed based on good performance.
This approach provides the benefit of a minimum of stability, thanks to working hours that often are fixed.
Commission often leads to more energy among employees who depend on the proportion of their sales for their living, which can raise the standard and quality of service. Sales remains an art – you have to be persuasive, know your product and know how to adapt to the individual needs of your customers. On the other hand, the persuasion techniques of the commission seller can sometimes become insistent and irritate customers. So you have to measure your service to avoid driving them away!
A fixed salary, by the hour or by the year, lets your budget be set for the long term and live in greater stability. It includes certain social benefits, including various holidays or group insurance, which is not the case for someone paid 100% on commission. However, the latter’s salary will never be capped; by dint of perseverance, she can fetch a good income without having to depend on anyone for a raise, aside from her own volition!