Sales careers can be found in nearly every industry, from retail and manufacturing to the pharmaceutical, automotive and insurance industries. Within each industry, you can find inside sales jobs, outside sales jobs and combinations of the two. Inside sales often require you to cold-call customers, convince them to buy, and make the sale on the spot. Outside sales involves meeting one-on-one with clients to make a sales pitch. Salespeople often work on commission, or a percentage of the sale that the rep makes. They may also receive a base salary or set wage just as an hourly employee would. Advantages and disadvantages are associated with each type of compensation plan.
Within sales careers, you'll find several variations on the salary or commission compensation method. Some sales jobs pay salary only while others pay commission only. Others combine the two approaches, offering a base salary and a commission plan. With these types of jobs, your base salary may be minimal and your commission plan generous, or the base salary may be generous and the commission plan small. In some jobs that pay commission, a "draw" may be offered. A draw essentially equates to advanced commission payments ahead of the sales you'll make. Some employers may also pay cash bonuses -- no matter what your compensation plan -- if you meet or exceed your sales goals.
The way in which you're paid may have an impact on your motivation at work. Employees who receive commission-only paychecks may have more motivation to meet or exceed sales goals as their income is tied solely to their performance. The more the employee sells, the higher his paycheck. On the other hand, an employee with a base salary, depending on how large it is, may have less of a motivation to work at the highest level since he is already being compensated for his time and effort.
A base salary-plus-commission paycheck promotes economic security, guaranteeing you at least a minimal paycheck in times when sales are slow. Companies that pay base salaries may also be more vested in your future with the organization and your ability to perform. They may provide a formal training program and extend certain other benefits. While a commission-only job may not have the same type of economic security attached, it provides a higher overall opportunity. Though your paycheck may fluctuate, commission-only jobs tend to pay higher commissions than jobs with a base salary. These types of jobs also typically provide more freedom; you have more control over your workday than an employee who's being paid a set rate.
On the flip side, jobs with a base salary may require more effort as employers generally will not want to compensate someone who's not performing or meeting sales targets. You may be required to engage in certain activities, such as weekly meetings and coaching sessions. You may be required to document your time with reports or goal trackers so your boss can keep track of your performance. A job that pays only commission also has its downsides. For example, though you're provided more freedom, you must continually work to develop the self discipline necessary to follow through with work activities. You may also may have more out-of-pocket financial expenses, such as travel and mileage, than someone working for a base salary.
All things being equal, the employer for whom you choose to work may come down to the type of compensation plan he offers and your own personality and preferences. If you're motivated by challenges and you want to work on your own, the job with a commission-only structure may be more suitable. If you need structure and regularity, on the other hand, a job with a base salary and the opportunity to earn bonuses and commissions may be what you need.