4 May, 2021
By Jeff Gillis
For many people, commission-based jobs are incredibly intriguing. They give you the ability to increase your earning potential without having to find a new position, which is pretty sweet.
But there’s also a lot of confusion about commission work. Many people aren’t fully clear on how sales commission functions, whether these kinds of roles are worth pursuing, and what the best commission jobs even are.
So, if you want to understand the ins and out of commission work, you’re in the right place. Here’s everything you need to know.
What Is Commission?
Alright, let’s start with the basics and answer one critical question: What is commission, anyway?
Well, a commission is a type of performance-based compensation. You earn a particular amount of money for accomplishing a specific goal.
What kind of goal? Well, usually it’s making a sale of some sort. However, some professionals earn commissions for other activities, like setting up meetings with prospects, securing contract renewals, filling job openings, and more. It simply depends on the nature of the role.
How much compensation do you get as commission? That actually depends. First, there are two major approaches to this kind of compensation: flat-rate and percentage.
With a flat rate, you get a set dollar amount for accomplishing a particular task. For instance, you might earn $50 per every five sales, or something similar.
With the percentage approach, how much you earn is usually related to the value of the sale, the amount a new hire placed in a job opening makes in a year, or a similar metric. For example, you may earn a 5 percent commission on every sale. That means a $300 sale nets you $15.
Additionally, there are two kinds of commission-based jobs: fully commission and partially commission. Some commission jobs include a base salary along with commission, while others don’t have any base salary. With the latter, you only earn commission.
It’s also important to note that when you see commissions show up in your paycheck can vary. Some companies pay it out monthly, while others distribute commission pay on a quarterly or annual basis. There can also be a delay between when you accomplish the associated task and when commission for that specific work is paid.
For example, let’s imagine you get monthly commission, and you’re paid on the first of the month. It might not be possible to pay your commission for all of your June work on July 1, as there is usually a processing delay. Instead, you might get that payment on August 1 instead.
If there is a delay, the employer usually spells it out clearly. That way, employees understand what money is coming when, allowing them to plan properly.
So, what does it take to thrive in a commission-based job? Drive, determination, and resilience are usually biggies. If it’s a sales position, then strong communication skills are essential. Being a great negotiator helps, too.
While it isn’t really a job requirement, some financial savviness is also pretty important. Why? Because your income may be surprisingly inconsistent. If you don’t know how to plan for that, you could be in trouble.
Commission work can also be very high pressure, depending on the industry. It could be the company putting the pressure on you, pressure from cut-throat colleagues who want to boost their numbers, or pressure you place on yourself to make sure you earn enough.
Plus, if it’s a sales commission job, there’s a good chance you’re going to hear “no” a lot. People who excel in these roles know how to keep pushing, knowing that a “yes” might be on the horizon. However, that isn’t to say it can’t be frustrating, if not outright demoralizing sometimes.
In many cases, commission jobs just aren’t for the faint of heart. That’s why you need a boatload of resilience.
But on the other side, they do give you some control over your earnings. If you’re diligent and amazing at what you do, the sky might be the limit. That’s what can make commission work so attractive.
Top 10 Best Commission-Based Jobs
1. Real Estate Agent
When it comes to classic commission jobs, real estate agent is a big one. More often than not, real estate professionals’ salaries are entirely based on how many properties they help sell.
Both buyer’s and seller’s agents get a commission, usually around 5 to 6 percent split evenly between them. That means, after facilitating a $300,000 property sale, each one receives $7,500 to $9,000, depending on the commission structure.
Now, it is also possible to be both a buyer’s and seller’s agent on a single property. If that happens, you get to keep the full 5 to 6 percent. Using the example above, that would snag you $15,000 to $18,000 on that $300,000 sale.
Now, real estate agents typically earn around $51,220 per year. After all, you’re not snagging a sale every single day. It usually takes some time.
However, plenty certainly earn more. The top 10 percent bring home more than $174,120 annually, so keep that in mind.
2. Sales Engineer
When it comes to unique sales jobs that usually involve some commission, sales engineer definitely qualifies. Usually, you find these roles in the technology or manufacturing industries, particularly with companies that offer customizable products or services.
These professionals need plenty of technical expertise along with salesmanship, ensuring they can both convince a prospective customer that making a purchase is a good idea but also help them adjust the product or service based on the customer’s technical specifications.
During the purchase process, the sales engineer helps outline with customizations the customer wants, essentially adjusting the end result until it’s perfect for that single person or business. They might even spend time gathering details for fully custom solutions, depending on the company they work for.
Sales engineers usually earn quite a bit in exchange for their expertise. Commission often accompanies a base salary, too, so there’s a bit more security than a pure commission role.
Overall, earning around $108,830 a year is typical. However, some cross $184,190, which is pretty awesome.
3. Securities, Commodities, and Financial Services Sales Agent
If you’re looking for commission-based jobs with a ton of earnings potential, securities, commodities, and financial services sales agent needs to be on your list. These jobs play a crucial role in the broader financial marketplace, helping buyers and sellers come together and ensuring customers can get the support they need.
Along with fast-paced positions like stockbroker, there are also lower-key options available, making this option potential worthwhile for a wide range of people. Plus, making about $65,420 a year is the norm, which is definitely respectable. But if you aren’t afraid to push yourself, you could be earning upwards of $171,700, showing just how much potential these jobs have.
4. Wholesale and Manufacturing Sales Rep
If you prefer the world of business-to-business (B2B) sales and don’t mind at least some of your earnings being commission-based, working as a wholesale and manufacturing sales rep could be a great choice. Usually, these jobs focus on getting other companies – typically retailers – to purchase something created by the manufacturer you work for, which is pretty straightforward.
On the commission side, you usually earn either a set amount or a percentage for each contract you secure. As a result, there is plenty of potential.
Plus, this is a role that can come with some travel opportunities. At times, you may need to head out on the road to meet with potential buyers and provide product demos, adding some variety to the position.
When it comes to annual salaries, $65,420 is common. However, it’s possible to cross the $129,200 mark, so keep that in mind.
5. Travel Agent
Many people don’t realize that travel agents usually earn commissions. In most cases, the vendors featured in vacation packages and any associated add-ons are the ones that pay the bonus, a move that is designed to entice travel agents into favoring their properties, services, or other offerings.
One of the benefits of this commission job is that it isn’t as high pressure. You aren’t usually cold-calling people. Instead, customers more often come to you.
Overall, you can expect to earn around $42,350 a year once you get the hang of the job. In time, you may even be able to bring home over $73,360, all while helping people plan amazing trips.
6. Advertising Sales Agent
A traditionally commission-based job, advertising sales agents sell ad space to companies, like billboards, radio ads, magazine advertisements, website ads, and even television commercial timeslots. In some cases, they also assist with the creation of the advertisement copy, giving companies some help with designing their ad.
Based on the nature of the role, a solid understanding of both marketing and sales is valuable. That way, you can offer a ton of support to customers, increasing the odds that they’ll keep buying ad space.
In most cases, you can expect to make about $54,940 annually in these kinds of positions. However, some make over $124,030, giving you an idea of how far this career can take you.
Now, it’s important to understand that not all recruiters earn commission. Instead, this is more commonly the case with outside recruiters who help client companies find professionals for hard-to-fill positions. In those cases, a recruiter typically makes either a flat fee or a percentage of the new hire’s annual salary as a type of commission.
There are actually a lot of aspects to working as an outside recruiter. Along with securing business from a client company, you also have to locate candidates and convince them that going for the role you want to fill is a smart career move.
In many cases, you need more than just salesmanship. Understanding the kinds of jobs you hire for also helps, as it makes it easier to identify great candidates for the positions.
Generally, recruiters earn an average of $84,441 a year. However, that can vary depending on your experience level and niche. For example, with legal and executive recruiters, the averages are more like $102,844 and $99,052, respectively. As a result, if you have expertise in the right field, you could certainly earn more.
8. Insurance Sales Agent
In the vast majority of cases, commissions play a big role in an insurance sales agent’s salary. Their main duty is to convince customers to sign up for certain kinds of insurance, such as auto, home, life, and more.
At times, you may specialize in a single insurance category. However, other insurance agents tap on at least a few, particularly if one service is frequently bundled or associated with another. For example, if you sell auto insurance, there’s a decent chance you would also offer homeowners or renters.
Generally speaking, insurance sales agents make around $54,940 a year, but that isn’t always the case. Some actually bring home more than $124,030, which is definitely impressive.
9. Pharmaceutical Sales Representative
If you’re interested in the medical field but don’t necessarily want to offer direct patient care, then working as a pharmaceutical sales rep could be worth considering. You head out and promote your employer’s products or medical treatments, typically by meeting with doctors one-on-one to discuss the offering.
This position does require quite a bit of know-how. Not only do you need solid sales chops, but you also need the ability to quickly learn about new products, allowing you to present them in the best way possible, answer questions about them, and more.
Overall, pharmaceutical sales representatives typically make yearly salaries of about $69,047. If you advance into a senior sales rep role, $82,596 is more common, and pay rates above $93,812 are certainly possible.
10. Talent Agent
When people think about commission work, talent agent isn’t usually what springs to mind. However, that is pretty much how it works. As a talent agent, you represent performers, writers, athletes, or similar people and, when you help them secure work, you typically get a cut.
Exactly how much you can earn certainly varies. However, $75,420 a year is definitely common, and the top 10 percent often cross $190,500.
Putting It All Together
Ultimately, all of the commission-based jobs above are worth considering. Just make sure you’re comfortable with any sales aspects, as those are a common requirement of the work, as well as how the commissions are structured. That way, you can find a great role that offers fair compensation.
Thanks for reading!
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