If you are working a sales job or you plan to apply for a sales job in the near future, then you need to know about the most common types of commission in sales jobs. Your commission will vary from place to place or even position to position within the same company, so it’s vital that you understand the nuances between the types of commissions.
If you are planning on applying for sales jobs in Canada, jobs in the UK, jobs in the USA, or jobs in Australia, then consider using a site such as Joblang which will allow you to browse for a wide variety of sales jobs no matter where you live.
The following are the most common types of commission in sales jobs that you need to know.
Some sales jobs have no commission at all. This means you will not get a cut or percentage of any sales and you will instead receive a flat salary that is not impacted by any sales you make.
Base Plus commission
Base plus commission is the combination of a base flat salary with the opportunity to earn a certain percentage from your commissions. How much you can earn will depend on the company, as companies have different policies on when the “plus commission” actually starts coming into play. Most companies will set a requirement for commissions to start, such as requiring a certain amount of sales within a certain time period.
Commission exclusive/Commission only
With some sales jobs, you will make a commission exclusive salary—which means that you are being paid by commission only. This type of job has the potential to earn you a lot—or nothing at all. If you make no sales, then you will receive no commission for that entire month. By contrast, if you make a lot of sales, you will be receiving a lot of commission.
Occasionally, companies may also offer residual commissions; these commissions are based on residuals from active client accounts. This type of commission is not very common and most sales people will never receive them, but if the companies you’re applying for does mention the possibility of residual fees just know that it is a possible way to earn more commissions over time.
Straight vs. variable commissions
You also need to know the difference between straight and set commissions, no matter what type of commission you are receiving. A straight commission is a straight, flat percentage (or sometimes a specific amount) that you will earn per commission. A variable commission is a commission that may change based on various factors, such as how many sales you’ve made that month.
Knowing the different types of commissions available at your sales job is important in order to determine the average income you could make from that job. Generally, employees who make pure commissions have the highest earning potential—but it comes with the greatest risk, since there is no base pay to fall back on.