by Chad Bronstein, CEO

It’s an age old conundrum.  If you pay a sales rep a sales base salary, the theory is they are less likely to be motivated. Offer them 100% commission only sales and the amount of interested candidates wanes. What to do? With a low unemployment rate and a smaller candidate pool currently, offering a base salary is a great idea. Read on for some insight

base salary payment

Fortune 500 Are Doing It

Over the years we’ve noticed that all of the very large companies we work with pay a nominal sales base salary of between $300 and $600 per week.  Most of these companies are in the door to door or home improvement space. At first glance, it seems a little strange that they would offer a base. But looking closer, they are benefiting from a boon in name recognition (eg., Scotts Lawn or Home Depot) and win greatly by offering a small sales base salary as well as a variety of other benefits such as health care or a 401k plan.

Candidates are as Savvy as You Are

While the dream is to hire 100% commission only salespeople, the reality is that it’s much more difficult to do so without paying a base or offering any kind of benefits. Have you ever posted your resume online? If not, you should try it. Candidates are bombarded with 10-20 emails a day about various jobs. Many are MLMs or scams of some kind, so candidates are understandably wary of all offers. They approach their job search the way you might approach looking for information online, such as researching a new vendor. There’s so much information to go through, we just don’t have the time to look at every last thing anymore. Everything is quickly scanned so that we may rule it out. Jobseekers are doing the same thing with the offers they get by email. They’re looking for specific things:

  • Is this a scam or rip off?
  • What company is this?
  • Does this opportunity match what I’m looking for?
  • How much does it pay?
  • Is it commission only sales?
  • How does the website look?

Reach Into Your Pocket

Instead of commission only sales, can you afford $400-500 per week for an initial period of two or three weeks while you determine if the sales rep is going to work out? The sales rep gets a little security and the ability to pay for a few basic necessities, and you benefit from a much larger candidate pool. At $500 per week, it’s unlikely that your fledgling sales rep will rest on their laurels. You also are gaining an edge in a candidate’s market.

Bottom Line

These large companies pay small sales base salaries because it makes sense. They’ve got a lot of seats to fill and they’ve figured out the most efficient way to reach that goal. While paying a sales base salary certainly isn’t a requirement, you’ll notice a huge difference in the numbers and quality of salespeople coming through your door. Your company will also receive fewer complaints and will be less likely to be viewed as a scam or rip off.