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The Pros and Cons of Commission-Only Jobs (Full Guide)

Most people would agree that there are good points and bad points to any job. But when it comes to commission-only jobs, these can be a little more extreme. On the one hand, you have the potential to make a lot of money. On the other hand, you can easily find yourself out of a job if you don’t sell enough.

 So, let’s take a closer look at both sides of the pros and cons of commission-only jobs debate.

What Is A Commission-Only Job?

What Is A Commission-Only Job?

This is the type of job where you are paid solely based on your sales. It can be in any field such as but usually; it’s in the insurance and real estate sector. In some cases, you may also receive a small base salary, but the majority of your income will come from commissions.

Common Types Of Commission-Only Jobs

There are four ways employers can structure commission-only jobs:

1 Fixed Per Sale

You receive a certain percentage of each sale you make. For example, you may get 10% of each sale you make.

2 Draw Against Commission

You are given a draw, which is essentially an advance on your commission. For example, you may be given a draw of $500 per week. This means that you will need to sell enough to make at least $500 to get paid that week. Any sales beyond that are a bonus.

3 Variable Commission

Variable Commission

 Your rate varies based on the product you are selling. For example, you may get a 20% commission on sales of product A but only a 10% commission on sales of product B.

4 Hybrid

A combination of two or more of the above structures.

Common roles include:

  • Talent Agent: You receive a fee for every actor or musician you book.
  • Retail Sales: When you sell products to customers in a physical store or online.
  • Insurance Sales: This role involves selling insurance policies and usually has a very high commission rate.
  • Real Estate Sales: When you sell, rent, or help a person buy a house or property.

The Pros Of Commission-Only Jobs

1 You are Flexible with Your Time

You are Flexible with Your Time

When you work on a commission basis, you are usually not tied down to set hours. This can be a great perk if you have other commitments outside of work or if you simply want the freedom to take a day off when you feel like it.

 Of course, this flexibility can also be a double-edged sword, but we will talk more about this later! Being flexible with your time also gives you the chance to pursue passion projects, potentially making you more money in the long run!

2 You Have the Potential to Make a Lot of Money

If you’re good at your job, you can make a lot of money. The sky is the limit when it comes to how much you can earn. This can be a fantastic way to increase your take-home pay and potentially save for retirement or other long-term goals.

3 You Don’t Have to Answer to a Boss

Commission-only jobs also mean that you don’t have to answer to a boss (in theory!). This can be a great reward if you don’t like being micromanaged or if you feel like you can do your job better without someone constantly looking over your shoulder. 

4 You can work independently

No more having to work with annoying co-workers or putting up with a boss you can’t stand. In this line of work, you are usually working independently, which means you can control your work environment. 

5 You can work from home

This is a benefit that is becoming more and more popular with the rise of technology. There’s a lot to be said about being able to work from the comfort of your own home. No more commuting, no more stiff office clothes, and no more office politics!

6 Motivation

What better motivation than a direct increase in your paycheck based on your performance? If you’re the type of person who is driven by results, then you are likely to work harder in this role and see a direct benefit from it.

7 Spend more time with your Family

Spend more time with your Family

Because you have the potential to make your own hours, this type of job can give you more time to spend with your family. This can be a great perk for parents who want to be able to see their kids off to school in the morning or attend school functions.

8 Save Money on the Commute

Although this will depend on where you choose to set your office up, this type of arrangement has the potential to save you a lot of money. It’s not just gas or travel costs; think coffees, lunches, after-work drinks (which you don’t want to attend), expensive office clothes (and all the ironing that comes with them).

9 Less Monotony

With a traditional job, you are likely to do the same thing day in and day out. But with commission-only work, every day is different. You never know who you will meet or what new challenge you will have to overcome. This variety can keep things interesting and help you to avoid burnout. Your day is what you chose it to be!

102 Prestige

A certain level of prestige comes with being your own boss and setting your own hours. You are seen as being in control of your own destiny, and this can be very empowering.

The Cons Of Commission-Only Jobs

1 You Might Not Make Any Money (or worse, you might lose money)

One of the biggest drawbacks of commission-only jobs is that you might not bring home a regular paycheck. If sales are slow, your income can take a big hit. This can make it difficult to budget and plan for your financial future.

2 You Might Feel Pressure to Work Long Hours

You Might Feel Pressure to Work Long Hours

The pressure to sell can sometimes be intense, which can lead to long hours. If you’re not careful, you can quickly find yourself burning the candle at both ends. This can be especially tough if you have other commitments outside of work. Not having fixed hours can also make it difficult to establish a work-life balance.

3 You Might Struggle to Motivate Yourself

When you’re not working for a regular salary, it can be tough to stay motivated. It can be easy to slack off or take shortcuts if you don’t feel like you’re being compensated for your efforts.

4 You Might Have to Give Up Some Benefits

Commission-only jobs often don’t come with the same benefits as regular jobs. This can include things like health insurance, paid vacation days, and retirement plans. If these are important to you, you might want to think twice before taking this type of role.

5 You could get fired more easily

In a commission-based job, you are usually working independently, which means you don’t have the same job security as someone who works for a company. If you don’t sell enough products, you can easily find yourself out of a job with no safety net.

6 The Bank may see you as High Risk

Not having a stable income can make it difficult to get approved for loans or other types of financing. The bank may see you as high-risk and be less likely to approve your loan application. Your premiums for things like car insurance may also be higher since you are seen as a high-risk driver.

7 You Might Have to Pay for Your Training

These types of jobs often don’t come with training or development opportunities. This means that you might have to pay for your training if you want to stay ahead of the competition.

8 Lack of Support

Whilst being your own boss and working independently is great, it also means that when things get tough, you don’t have the same type of support network that you would in a more traditional job.

9 You May Have to Start at the Bottom

Commission-only jobs can sometimes be entry-level positions. This means that you might have to start at the bottom and work your way up. It can take time to build up a client base and start earning a good income.

10 It can be difficult to progress in your career

Whilst you can potentially earn a lot of money in a commission-based job, it can be difficult to be promoted. There may not be many opportunities for advancement, and you might have to move to a different company to find a better position.

Ace That All Important Interview!

Let’s help you prepare for the necessary questions you’re likely to be asked, such as How Would You Describe YourselfWhat Makes You Unique, or perhaps Why Do You Want To Work HereHow Do You Handle Stress, and What Are Your Career Goals?

Next, we also cover questions like how to Answer Why Best Candidate PositionWhy We Should Hire You, as well as What Are You Most Proud OfHow Do You Handle Conflict, and the Best Questions To Ask In An Interview for when it’s your turn to get creative!

Lastly, why not take a look at the best Flexible Jobs That Let You Set Your Own Hours, or even Top Easy Jobs That Pay Well, along with 15 Part-Time Jobs That Pay More Than 40 Per Hour, and the 20 Part-Time Jobs That Pay More Than 20 Per Hour in 2022.

The Pros And Cons Of Commission-Only Jobs – Final Thoughts

If you’re on the fence about taking a commission-only job, hopefully, we have helped you make up your mind.

 Whilst there are some great benefits to working in this way, there are also a few drawbacks that you need to be aware of. Make sure you weigh up all the pros and cons of commission-only jobs before making a decision. Are you ready to become your own boss and work independently? If so, then this might be the right role for you!

Good luck, and remember to stay productive!

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About Robert A. Casey

Robert works with his girlfriend at a busy LA actors agency, where he secures roles for a number of B-list and a few A-list celebrities. His knowledge and connections within the film and TV industry are very impressive, and he loves sharing his experiences with all our readers on the site.

He lives in Studio City with his girlfriend Rachael, and his cat, Gerald.  

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