Why to be wary of commission-only sales staff

From Wendi Moore, Edina, MN

What happened to Dean also happened to me recently. I hired a sales director and was very generous to her with a base and commission. She had won all of these awards and was suppose to have hundreds of contacts across the country. It was a disaster from the beginning. She has almost made my business go bankrupt. In the end, I found out I was paying her to take all of her friends out to expensive restaurants for lunch, dinner, and cocktails. She really screwed me over. She had contacts all right. Contacts that did not give us any business, but loved the fact that I payed for their partying. Now that she's gone, they won't give me the time of day. Some of them have even blacklisted my our email address within their company – after one phone call to them. That might not be the typical experience with a salaried sales person, but it's been mine. Right now, I am hiring sales people on a per-project basis. They are paid at specific intervals as they finish the project. This may be a better arrangement for a small business owner.

From Dean Barnhart, Everett, WA

Interesting perspective. Here is my experience. I have hired 3 sales people in the last year. I paid the first two generous base salaries with lower commission options. There sales totals, 0. My last sales person I gave him a lower base with a nice sign on and a much larger commission rate. His sales total? 0 and it turns out he embezzled from another company he was working for at the time and is now going to jail. These were people with sales pedigrees, awards etc. My situation now as a small company? Well I am happy you asked, it tanked me. With no sales in the pipeline we have had 8 months with no revenue. Name a company that runs on now sales and I will sign up. I am now selling myself because I don't trust them. I have thought of going straight commission for a 6 month period but with a 3 month sales cycle those guys won't ever really be able to get their mind wrapped around the potential. An average commission for me would be 15% of a $300,000 gig. The goal is 3-4 per year. A knowledgable salesperson could easily hit 8-9 per year. Go figure….

From Michael, Bethesda, MD

I am in the same boat as Henry. My new boss is dismantling my group, and has told me to outsource the sales function. I see there are many firms on the web that can act as third party sales agents but I doubt any specialize in our business. I plan on proceeding very carefully, and use LinkedIn as well.