Commission vs. Hourly Rates - Weighing the Pros and Cons

In the sales world, most of the money you make is most likely going to be based on commission. That means that you will be paid based on the sales you make, not based on the amount of time you work. Some people don't like this idea because it really provides no guarantee. Others love it because it offers them an endless opportunity to make money. In order to determine if a commission style job is right for you, you need to weigh out the pros and cons. The guide below should help you do just that.

People Who Work Well with Commission

The people who work well in commission based jobs are the ones that know how to sell just about anything. If you can sell five times the amount of products that someone else can sell, shouldn't you be rewarded for your efforts? That is the

whole purpose behind commission based work. It encourages you to do everything you can to make a sale. If you make the company more money, you make more money. It's as simple as that. For the good salespeople out there, this is the best option for them.

People Who Work Well by the Hour

If you are not the best salesperson in the world, you may be better off working on an hourly job. Otherwise you could get into debt really quickly. Some people aren't cut out for this industry, and you need to know if you are early on. If you aren't, you either need to find a different job or you need to find a way to get a guaranteed paycheck. That way you can take your time on your sales and try to make the most out of every deal you get. You'll be costing the company money this way, but that may just be what you have to do to earn a living.

A Better Explanation…

To explain a little further, let me relay some of my personal experiences to you. I make a living writing articles online, and I'm very good at my job. In my line of work, I have the option to either get paid by the hour or get paid by the amount of words I write. That follows the same principle as getting paid per item that you sell. In my case, I choose to get paid by the word. Here's why…

If I'm really focused on my work, I can write a 400 word article in about 10 minutes. That means I'm writing about six articles of 400 words every hour. Most people can only write two articles of that size in an hour, and some can only write one. Let's assume that the hourly rate that most people make is $15 an hour, even though that is on the high side. Minimal pay in my line of work is usually $.01/word, and I actually make a lot more than that. With those numbers alone though, I'm already making $24 an hour working by word. Thus it is more logical for me to be paid by volume than by hour. People who work slowly may only make $4 to $8 an hour, so it would be in their best interest to work with the hourly rate. That's the difference.

If you know what you're doing and you do it well, go for a commission based job. If you are still learning or you just seem to struggle to do well with your work, go for an hourly job. Either way, you should be able to come up with something that pays what you need it to. You may not make a forensic psychology salary, but you should be able to come up with something to make ends meet.