Commission Model

In its day the 100% commission structure yielded many an entrepreneur a great opportunity to earn a living well beyond that of any corporate structure. It also provided companies with very inexpensive resources in which to grow; an excellent return on investment (usually zero aside from some training).

Unfortunately, many things have changed in today’s business climate. Sales & the function of selling are confronted with a new landscape & playbook. What years ago was a simple act of knocking on a door a securing a PO has been replaced by a complex retail structure, unreturned emails/calls, global competition, retail consolidation & ever increasing investment in time & travel.

Herein lies the major difference as to why this model struggles to work for either side today; length of sales cycle. Years ago, an independent salesperson was pocketing commissions from sold goods in 30-60 days; with very little upfront expense (gas, new insoles!!). Today, an individual may be looking at anywhere from 6-12 months for their first check and they would have had to dig deep into their own pockets to cover travel, time & other expenses. It is rare to find the individual that is able to do without a paycheck for nine months and also has the resources to invest in selling & marketing new products & services.

Although there are other factors affecting the usefulness of this model today; the sales cycle alone is good reason to seek alternatives. More often than not 100% commission will result in high turnover (check any job board), & companies struggling to reach sales goals.