Advantages & Disadvantages to commission only and commission + Sales Jobs
Looking for a new job in sales? Cant decide between a Basic +commission contract or a commission only contract!
Advantages of a Basic+Commission Contract:
Job Security – You know your bills will be paid each month, even if you have had a bad month for sales.
Stability – If you have a basic salary you will more than likely progress up the career ladder within your organisation.
Benefits – You will have more benefits as you stay and progress with your organisation. Typically, other benefits could include such things as health insurance, company car, Childcare vouchers, Evenings at top restaurants, holidays or bonus schemes.
Training – You will be offered more training by your organisation.
Expenses reimbursement – You will usually be reimbursed for Mileage and would usually have a phone to make calls on.
Uncapped Commission - There is a massive earning potential for any contract with uncapped commission. The more sales you get the more you earn on top of your base salary!
Disadvantages of a Basic+Commission Contract:
Reduced commission rates – Employers will decide how much money you should make and with a basic salary the commission on sales would usually be lower. (however this should not be an issue if you have a basic salary).
Less Freedom – As you will become employed by the organisation and bound to your contract.
Less Competitive – In the sales culture we thrive on beating the competition! With less targets and a basic we can become bored.
Capped Commission - Limits your earning potential
Advantages of a Commission Only Contract:
High Earnings Potential - Potential to earn a considerate amount depending on how much work you put in.
Freedom – Do what you want when you want and work the hours and days that you choose.
Lower Taxes – If you get yourself a top accountant, then being commission only can work in your favour.
Disadvantages of a Commission Only Contract:
No Financial security – There is a lot more pressure on you to get those sales, because you need them to live off.
Too much freedom – You make find it difficult to motivate yourself and discipline yourself.
Higher expenses – You may not get reimbursed for your mileage and you may not have a phone contract paid for.
More government regulations – You will have to file your own self assessments to the HMRC and your own VAT reports.
Less job security – Your Organisation can terminate your contract whenever they want to.
