Fixed Salary vs Commission?

[LaFemmeFatale_1]

My company offers me a new temporary job from work, this is experimental, as it’s the first time they try this and they offer me to have either fixed salary or a commission from the sales of the intellectual property I’ll create.

I’ll work there till I am able to walk by myself again.

Which one would you choose?

[molonski2]

This one I think I can answer well because this is how I worked , but I don't know your product on you do , straight commission is always the best if you know you can make it work , and make sure the contract is water tight , and the product is good and sellable.

So , it the property , you could have an appearance fee ( Australia ) of about 60k , if you took the 60k you got $1,500 aud flat per block of land , and $2,500 flat for an apartment , all paid on unconditional contracts big bonus.

Now , I was offered forget the 60k , take if off , straight comm $2500 .00 per block of land and $3,250 per apartment ( Margin tighter here ) , they said they were very happy if I went commission only , and I stressed I did not want income topped out by success , and that this deal be 3 year , not 1 years , because I knew year 1 was going to be huge , and they as a listed company might get nervous... First year was 207 block of land , yep , you work it out , I was wayyyyyyy in front , Year 2 was quiet because virtually nothing to sell , but year 3 , was on par with year 1 .

Straight comm is always better if your product is great.

[JacobJordan]

You need to ask questions. What is the salary. What is the commission rate. Do you keep 10% of total 20% 100% what you keep is very important when factoring which will be more beneficial. For example if the salary is 100k/year and the commission is 40k/year + 20% of each sale. And you sell $600k for the year then you get $120k as commission which results In a yearly total of $160k which is far better. So you need to know what the percent commission is + what the base salary is for that. Then you need to run some numbers to figure out which one results in the better pay. Utilize an average for the sales. For example if cars 3 per week or 150 per year so you guesstimate an effective salary

[katiesmuff]

This would be so difficult for any of us to whey in on as we have absolutely no idea what the salary would be compared to going the commission route. With a salary you at least know what you will have each week or month.

[Nikki1989]

I receive salary plus bonuses. I am happy with that.

[DJB72]

If it's "either... or" then I'd take the fixed. That way the company carries the risk. Ideally you should negotiate for fixed until your sales reach a certain level and then move to the commission or a combination of fixed and commission.

While you're incapacitated make sure you have a steady income stream. Once you are mobile again you can renegotiate your position. If you're making the company money while off your feet you're valuable enough to be able to move somewhere else if they refuse to give fair compensation once you're able to be making more for them.

Document your sales progress and keep copies so you can present it to other potential employers in the future and it can't be refuted.

[Anonymous]

Largely depends on your company. Normally I'd say commission so you get paid for how well you do and how much work you do but these days companies want you to work on commission but pay you like salary. Even moving the goal posts and putting their thumb on the scales to achieve this to avoid having to pay you what you are worth. The bigger the company is, the greedier they are when it comes to paying good employees that make them money.

I say if you know people that work for the company or have worked there for a while you should get the sense of whether the company will screw you.

Don't know what kind of intellectual property you refer to but it's worth talking to a lawyer about it and ensure you can't be screwed over on it.

[msc545]

It really depends on multiple factors. You have to compare the rate of commission and the rate of sales against the amount of salary that you would receive in the alternative. This is not an easy calculation since you have to sort of forecast the future relative to sales which is uncertain. Unless you have a fairly reliable database of the past sales to work with. I think you should speak with an accountant about this kind of thing since it's quite technical.

[LaFemmeFatale_1]

I have never done sales before, they were the ones doing the sales, so I won’t have the database most likely, I will just work from home with a flexible schedule,

I am talking with my employer about this, can’t talk with an accountant, it’s between me and him (and his sister - she’s the co-owner) to decide. It’s the first time they do this project and they have no precedent of knowing how much they’ll make.

I have asked the price they’ll put on this “product” and will negotiate accordingly.

[lightbulb27]

is the hope to sell stuff good? since never done before, it's a risk. sales is great... as long as stuff sells.

how about a base + commission?

[LaFemmeFatale_1]

I don’t sell anything, I create, they’ll deal with the rest, they’ll sell.

[LaFemmeFatale_1]

I think about offering them the same: base + commission.

[RedInnocent68]

Blended. A low base for your regular working hours, plus a medium commission for the IP you create. If blended isn’t an option, than a high commission. If the company will receive annual licensing revenue from your IP, you should also ask for royalties. If royalties aren’t an option, use that negotiation to further increase your commission in either model.

[BoopBoopBeep]

Salary if there's no minimum on the commission. If it is seriously commission only then not interested. I don't like having income swing that much at a job.

[AviatorTom]

I'd negotiate with them... for a fixed salary plus a percentage of the sales if it exceeds a certain number.

[NathanDavis]

what @jacobjordan said... do the math, consider the chances...

[abc3643]

Neither.

Wages.

Every hour I work is an hour I get paid.
I work overtime, you pay me more per hour.
I love working on Christmas and getting triple time. $200/hour sounds nice.

[love_conquers_lust]

It's a risk either way. I like @AviatorTom suggestion.

[Guido]

If no other option, I would take the fixed income however if you can negotiate a base salary plus commission then that would be optimal.

[LiamJHayden]

Without specifics it can be difficult. I would calculate which way I am likely to make more.

[Sparkie460]

It all depends on what they are selling and how the market is for the product.

[worldscolide]

Salary all the way, Commission is NEVER guaranteed.