Job Market: High Risk, High Reward in Sales
By Mary Jacobs / The Dallas Morning News
DALLAS — A few years ago, Wayne Wright was laid off from his job in the telecom industry on a Friday. By Tuesday, he had a new job — selling electricity service on a commission-only basis.
As Wright discovered, straight-commission sales jobs are often easy to land, and many are open to entry-level people or those with little related experience.
But making them work can be another story, especially for someone with little selling experience.
“I had some tough times,” he said. “I survived, I got by, but that’s about it.”
According to Salary.com, commissions often account for a large portion, or all, of a salesperson’s compensation in businesses where the sales cycle is short, sales are highly profitable, and the number of sales is directly related to the salesperson’s skills.
Stock brokerages, insurance and real estate typically pay on straight commission. But there are also opportunities with relatively new products and services.
Since deregulation, many energy companies are hiring people on a commission basis to sell their services to business and residential customers.
But job seekers need to be wary, experts say. Some commission-only sales positions are really auditions rather than jobs, with extraordinarily high turnover and very few employees earning a reasonable income.
“Turn ’em and burn ’em” is the way Wright describes this hiring strategy.
“When a company hires people for a commission-only job, that can mean they’re not willing to invest in people,” cautions Barry Caponi, owner of Dallas Sales Training.
“If they’re only paying commission, the employer has nothing to lose.”
To recognize a good commission-sales opportunity from a dead end, Caponi advises job seekers to ask about training.
“Many companies will train people on their product or service, but not on how to sell,” he said. “If you’re new to sales, look for a position that will supply some training in basic sales skills.”
“Anyone who promises a lot, who says, ‘You’ll make a whole lot of money the first year,’ I’d evaluate that carefully,” said Suren Lalapet, vice president of AdvancedLED in Garland, Texas.
His company has hired people on a commission basis to sell its programmable electronic signs, called WindowLED, and is looking to hire more.
His advice: Ask managers whether they’ve actually done the kind of selling they’re hiring for.
“We’ve all walked the street and sold this product,” Lalapet said of his management team. “So when we say, ‘You can go out and sell one a day,’ we’re speaking from firsthand experience.”
To succeed at commission sales, Caponi says, employees must enjoy working with people, have self-discipline and a strong work ethic, and be able to handle rejection.
“Sales jobs are the ultimate gut-check jobs,” he said. “You’ve got to be honest with yourself, to determine whether you have the aptitude and the attitude to do this kind of work.”
Lalapet’s company had more success in hiring once it developed a clear profile of the kind of person who would succeed in the job.
“We found that people who don’t need money immediately, who can survive three months while building the business, have more success,” he said. “We want someone who’s going to come across well with customers, where there’s no, ‘I need to sell this to eat tomorrow.’ ”
College students who are computer-savvy and who have few financial responsibilities, he said, have worked out well. Once established, he says his full-time salespeople make at least $50,000 a year and as much as $90,000 in commissions.
Those figures don’t include benefits, which the salesperson must obtain at his or her expense.
Caponi advises job seekers to check their tolerance for risk when considering a commission-only sales job.
“Typically, the higher the commission, the greater the risk,” he said.
But commission sales jobs can also, ultimately, prove more rewarding.
“You work harder, but you actually end up making more money,” said Mike Rowhani, who sells signs for AdvancedLED to retailers. Commission sales usually start slow, while the salesperson establishes relationships with potential customers, but “it gets easier as you go along.”
Wright was able to leverage his commission-only experience into a position paying salary plus commission. The new compensation structure will make it easier to ride out the “dead” periods in the summer when sales typically lag.
“Originally, I had no choice,” he said. “But now that I know I can survive, I like the idea of sales. There’s money to be made.”
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