REAL ISSUES. REAL ANSWERS: Salary Vs. Commission

By / 1 year ago
Salary vs commision August 2015 real issue real answers

In a June 2015 survey, nearly half of respondents reported that their companies are having trouble finding salespeople, both inside (49.0%) and outside (48.3%). There’s no question that attracting and securing experienced sales reps is a problem. Instead, the question is, “What’s the answer?” Since compensation is a key driver, this month’s Real Issues survey asks what’s the most effective method of compensating salespeople: salary, commission, or a combination of both. Or, is the solution to this issue something else entirely? If there’s any doubt about this issue’s relevance: more than 350 dealers took time to weigh in with their thoughts on this month’s survey.

Salary vs. Commission

The Issue
This month’s question was suggested by an Illinois dealer who wrote, “With the ongoing changes in business practices, an increase in business, and the need for more experienced help to enhance sales, which is better: commission sales with smaller base, or fixed salary?” We took this question and expanded on it a bit — adding the option of straight commission to the mix. The survey was delivered via email to those who have opted in to receive our email communications. A big thank you to the 350+ readers who took time to share their insights. If you’d like to participate in future surveys, you can join our mailing list here.

The Questions
First, we wanted to get a gauge for the makeup of our survey respondents. After removing the 19 respondents who replied “Other,” we were left with 332 eligible respondents (246 lumberyards, and 86 specialty dealer/distributors).

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Rick Schumacher

Rick Schumacher is the editor and publisher of LBM Journal, and has more than 24 years experience covering the industry.