Are Commissioned Sales Positions Going Away?
More and more, businesses are advertising that their sales reps are not commissioned based. The reason why these businesses want the public to know that their sales force is salary based is to attempt to overcome the negative public opinion of commissioned sales professionals.
The Problem with Commissions
Traditional salespeople earn a base salary and commissions based on what they sell and how much profit they add to their sales. Knowing that the more profit added to a deal the more income earned motivates sales professionals to get as much profit in every deal as possible.
"Whatever the market will bear" is an expression which means that the salesperson should sell their products for as much as the customer is willing to pay for the product. The challenge with this approach to sales is that customers now have the availability to compare pricing from any Internet-connected computer or device. Customers are much more informed about whatever you are selling and will, most likely be better equipped and positioned to negotiate a lower price.
For today's sales professional, a more informed customer means that the pricing you propose for your product had better be in line with what their research indicates that your product should sell for or you will quickly lose any rapport you have established.
The Allure of a Non-commissioned Sales Force
Informed customers, who want or need to purchase a product, want to get the best deal possible. If acquiring the product demands that they work with a sales professional, they will naturally feel that they will need to be "on guard" and will expect to have to negotiate the price. If, however, the sales professional they work with what is known not to be a commissioned sales professional, the customer will not feel that they will have to negotiate the price as the salesperson won't earn more money if profit is added to the deal.
With this in mind, several businesses proudly advertise that their sales force does not earn commission, meaning that their sales force is employed only to help a customer purchase their products and will not benefit at all by adding any profit. The desired result is an increase in public opinion, more sales, and less payroll expense.
The Problem of a Non-commissioned Sales Force
There are many reasons to choose a career in sales. One reason is the ability to earn a substantial income. If a sales professional is hired by a company that doesn't pay commissions, the professional's income is, effectively, capped.
Limiting or capping the amount a salesperson can earn will drive tenured and talented professionals away from a company that uses a "no-commission" sales force and to a company that pays commissions. The result could be that a company that doesn't pay commissions will have a less talented sales force.
What the Future Holds
It is impossible for anyone to predict future trends accurately but there is an increasing number of sales positions that do not pay commissions. While most of these positions are in the retail space, a few companies, namely those in the financial services industry, is one industry that has been trending towards non-commissioned sales professionals.
If you are considering a non-commission earning positions, you will either need to be able to live your chosen lifestyle on your salary, work two jobs or find a company that pays some bonus based on your total sales or customer feedback.
You could, of course, decline the offer and find a position that allows for unlimited income potential and focus on always improving your sales skills!