How does commision work...um...work? And can I live on it?

Answer 1

You make some or part of all your earnings based on what you sell.

Some people are on straight commission. If they sell nothing, they get paid nothing. If they sell a lot, they get paid a lot. Professions like this are: Realtors, taxi drivers, many loan officers, many financial reps and many salesmen.

These people are either 1099's or independent contractors. In such a situation, the worker does not get taxes taken out and must pay them all at the end of the year. They must set a side a percentage of the money they earn to pay the government when taxes are due. It is best to consult with an accountant about this.

Some people get a base plus commission. The base salary is usually modest and then the commissions allow the salesmen to have a comfortable income if they get the sales. Commission percentages are usually lower for these salesmen because they are being guaranteed a base.

Can you live on commission? If you are good at sales and you know your product, then yes. If neither of the above applies to you then don't waist your time.

If you are just starting out in some new sales field, it might be better for you to work on a base plus commission. But some fields don't offer a base. If this is the case it is up to you to decide if you have enough savings to get by until you can start to make money. Or you might have to take some kind of job that will give you guaranteed income until the sales start to come in.

If you have been in a field for a while and have a network built up and whole bunch of contacts, you would most likely make more working straight commission.

Working commission is good and bad. It is a good thing if you are a good salesman that knows how to make money and represent a client well. Many successful salesmen make great incomes on commission.

It is a bad thing if you are a naive job applicant and your employer is looking to sucker someone into a job that no one else wants to do. Even if you just get a few sales, the company will get its cut. You might go bankrupt in the process, but they still make money because they never had to pay you a base salary.

So my answer is look in the mirror. If you can handle that type of job go for it. If not, don't waist your time by falling for any hype they spoon out at you.

Answer 2

You can't answer the question without more information on how the commission is earned. Most such jobs are pretty tough to get to the good pay. What happens is that the salesman is paid on things sold at a percentage or other formula. You can make very good money but it's often tough.

Answer 3

Did you know the highest paid people are those with talent and on commission. You will work harder and longer hours because you decide how much you want to earn.
I sold cars-on commission- for 15 years and averaged 90k