I first wrote this article about hiring commission-only sales reps back in 2013.
More than a decade later, I still see founders asking exactly the same question: why should I pay a salesperson a salary when I can hire someone on commission and only pay them when they sell?
On paper, it sounds like a great idea. There is no salary, very little upfront cost, and if the salesperson does not sell anything, you do not pay them anything.
The problem is that sales does not quite work like that.
I do not believe commission-only sales is inherently bad. There are industries where independent sales agents have worked successfully for decades.
However, there is a huge difference between building a genuine commercial partnership with an experienced independent sales professional and trying to find somebody who will build your sales pipeline for free.
That is where many startups get it badly wrong.
Why Commission-Only Sales Looks So Attractive
I understand why founders consider it.
Hiring a salesperson is expensive. You are committing to a salary before you know whether that person can successfully sell your product.
On top of that, there may be recruitment costs, commission, sales software, training and several months of ramp-up before they produce meaningful revenue.
For a startup watching every penny, commission-only can therefore look like the perfect solution.
The salesperson takes the financial risk and the company only pays when revenue comes through the door.
Except the work still has to be done.
Someone needs to find prospects, contact them, learn the product, understand the market, hold sales conversations, follow up opportunities and eventually turn those opportunities into paying customers.
That work has a cost, whether the company pays for it or the salesperson does.
With a commission-only model, you are asking the salesperson to absorb most of that cost and risk themselves.
Any experienced salesperson will therefore ask a very reasonable question: why should I?
Good Salespeople Have Options
This is one of the biggest problems founders overlook.
Strong B2B salespeople are valuable and usually have options.
The best ones can generally find companies willing to pay them a decent salary while also offering substantial commission when they perform well.
Imagine an experienced salesperson choosing between two opportunities.
One company offers them a salary, commission, benefits, sales tools, marketing support, existing customers and a product that has already demonstrated demand.
The other has an unproven product, very little pipeline, no established sales process and wants them to work without any guaranteed income until they somehow figure everything out.
It is not difficult to work out which opportunity most good salespeople will choose.
That does not mean talented commission-only salespeople do not exist.
They absolutely do. However, the good ones tend to behave much more like business owners than employees.
They choose what they sell carefully. They understand their market.
They often have established relationships and may represent several complementary products.
Their time is their own money, so they are unlikely to spend six months discovering whether your startup has product-market fit unless the potential return makes that risk worthwhile.
You Are Not Removing the Risk. You Are Moving It.
One of the biggest misconceptions about commission-only sales is that it removes the financial risk of hiring a salesperson.
It does not.
It simply changes where the risk sits.
You might not be paying a salary, but that salesperson is still speaking to your potential customers.
They are representing your company, communicating your value proposition, handling opportunities and potentially creating the first impression many prospects will ever have of your business.
That has value.
Imagine you have identified 500 companies that could genuinely buy from you.
Those companies are not simply names sitting inside a spreadsheet. They represent potential revenue.
If you hand that list to somebody who does not understand your market, sends poor outreach, pesters prospects or badly positions your product, you have still paid a price even if you never paid that salesperson a penny.
Lost opportunities cost money. A damaged reputation can cost even more.
A Salesperson Cannot Fix a Sales Model That Does Not Work
This is where I see startups make an even bigger mistake.
The founder has struggled to sell the product. The positioning is not completely clear. The ideal customer profile keeps changing.
There is no repeatable prospecting process and nobody really knows which messages generate meetings or which customers are most likely to buy.
Eventually someone decides the answer is to hire a salesperson.
It may not be.
The problem may be that the company needs to fix its sales model first.
Hiring somebody on commission does not magically solve unclear positioning, poor product-market fit or an undefined sales process.
You have simply handed somebody else the same broken puzzle and told them they only get paid if they manage to solve it.
I have worked with startups for years, and I believe founders should understand how their product gets sold before expecting someone else to scale it.
That does not mean the founder needs to become the world’s greatest salesperson.
It does mean somebody inside the business needs to have proved that customers will buy, why they buy, who buys and roughly what process gets them from first conversation to signed contract.
Otherwise you are not hiring somebody to execute a sales process. You are asking them to invent one for free.
Your First Salesperson Is Not Just Selling
This is another reason I think commission-only arrangements can be particularly difficult for early-stage businesses.
Your first salesperson is rarely just there to close deals. They are also helping you learn.
They are discovering which prospects respond, which messages create interest, what objections customers raise, where deals get stuck and which use cases resonate most strongly.
They may uncover competitors you did not know existed, identify problems with pricing or help you understand what customers actually care about rather than what you assumed they cared about.
That information can be extremely valuable.
If you want somebody deeply involved in building that knowledge with you, I think you need to recognise the value of the work they are doing before the first contract gets signed.
When Commission-Only Sales Can Work
When I originally wrote this article, several people disagreed with me.
Some had successfully built businesses using commission-only sales teams, and they had a fair point.
My original argument was too black and white.
Commission-only sales can work extremely well when the right conditions exist.
A company with a proven product, clear target market, predictable sales process and healthy margins is in a very different position from a startup that is still trying to work out who will buy its product.
The model also becomes much more attractive when there is strong marketing support, a reasonably short sales cycle, good sales materials and enough commission available for the salesperson to earn meaningful money.
Most importantly, commission-only can work very well when the salesperson brings something valuable that the company does not already have.
For example, an independent sales agent may already have strong relationships across a particular industry. If you give that person a complementary product they can introduce to customers they already know, the arrangement can make perfect commercial sense.
They are not being asked to build your entire go-to-market operation from scratch.
They are bringing distribution, expertise and relationships. You are providing a product and an attractive commercial opportunity.
That is a partnership.
An Independent Sales Agent Is Not a Free Employee
This distinction matters.
A genuine independent sales agent is effectively running their own business. I would think of them more like a channel partner than a cheap member of the sales team.
They may represent several companies. They may own many of their customer relationships. They may decide how and when they work.
Their network may have taken 10 or 20 years to build, and they will evaluate your opportunity just as carefully as you evaluate them.
That is perfectly reasonable.
The problem starts when a company wants all the benefits of employing a salesperson without actually paying for one.
They want someone working full time, attending internal sales meetings, updating the CRM, hitting activity targets, learning complex software, prospecting from scratch and representing only their business.
At the same time, they expect the salesperson to carry all the financial risk until a deal closes.
That is not a particularly attractive proposition.
The Longer the Sales Cycle, the Bigger the Problem
Commission-only sales becomes even harder when you are selling complex B2B products.
Imagine selling a £50,000 SaaS contract with a six-month sales cycle.
A salesperson could spend months prospecting, running discovery calls, giving demonstrations, building business cases, speaking with multiple stakeholders, negotiating commercial terms and working through procurement.
At the end of all that, the customer can still decide not to buy.
For an employed salesperson receiving a salary, that is part of the normal risk involved in sales.
For a commission-only salesperson, it could mean six months of work without earning anything from the opportunity.
If you expect somebody to accept that level of risk, the potential upside needs to justify it.
That is another mistake I see companies make. They want the salesperson to accept almost all the financial risk while offering them roughly the same commission percentage they might receive in a salaried role.
It is unlikely to attract the person you actually want.
Commission-Only Does Not Mean Cheap
If an experienced salesperson is taking considerably more risk, they should expect considerably more upside.
That is simply how the economics need to work.
A commission-only salesperson may reasonably expect a much larger share of a deal than an employed salesperson receiving a salary.
Depending on the arrangement, there may also be residual commission, territory rights, commission on renewals or ongoing ownership of accounts they introduce.
If your thinking begins and ends with, “Great, I do not have to pay a salary”, you have probably misunderstood the model.
The question is not how cheaply you can get someone to sell for you.
The question is whether you can create an arrangement that makes commercial sense for both sides.
Questions to Answer Before Hiring a Commission-Only Salesperson
Before recruiting anyone, I would start by asking whether the product is already sellable.
Can you or somebody else inside the company already sell it?
If nobody has managed to do that consistently, there needs to be a very good reason to believe an external salesperson will suddenly crack it.
I would also want to know exactly who the ideal customer is. “Companies with more than 50 employees” is not an ideal customer profile.
You need to understand the type of company, buyer, problem and situation that genuinely creates demand for what you sell.
Then there is the commercial reality.
How long does a sale normally take?
How many deals could a salesperson realistically close?
How much commission would they earn from those deals?
How much prospecting would be required to create those opportunities?
Work the numbers backwards.
If the salesperson would need to work six months before having a realistic chance of earning enough money to live on, you do not have a particularly attractive commission-only opportunity.
You also need to look at what you are actually giving them.
Are you providing leads, a CRM, case studies, sales materials, training, customer references and marketing support?
Or are you giving them a company email address and expecting them to figure out everything else themselves?
Finally, ask yourself the question good salespeople will ask:
Why should they sell your product?
You may be interviewing them, but they are also interviewing you.
What I Would Do Instead
If you are an early-stage founder who has not yet built a repeatable sales process, I would not start by trying to recruit an army of commission-only salespeople.
I would get much closer to the sales process myself.
Speak with potential customers. Prospect. Run discovery calls. Test different messaging. Understand objections. Learn who actually buys and why. Start documenting what works.
If sales is not your strength, bring in experienced help to build that process with you.
Once you have a clearer understanding of how the product gets sold, you can make a much better decision about what kind of salesperson or sales resource you actually need.
That might eventually be a full-time salesperson. It might be an SDR.
It could be an experienced sales consultant or an independent sales agent working on commission.
The point is that the answer comes after understanding the sales problem, not before.
The Expensive Mistake Is Not the Commission
This is the point I made when I first wrote about this subject in 2013, and I still believe it today.
The danger is not paying somebody too much commission.
The danger is believing that because somebody does not receive a salary, failure costs your business nothing.
It can cost you months of time. It can burn through valuable prospects. It can damage your reputation and cause you to lose customers you might otherwise have won.
Worse still, it can delay your business while you wait for a sales strategy that was never going to work in the first place.
Commission-only sales can absolutely succeed.
But it works best when both sides bring something valuable to the table.
The salesperson brings expertise, relationships, time and a willingness to take financial risk.
The company brings a proven product, a strong commercial opportunity, proper sales support and enough earning potential to justify that risk.
That is a business partnership.
“I cannot afford a salesperson, so I will find somebody who works for free” is not.
About the Author
I’m David Craig White, a British B2B sales trainer and sales performance coach with more than 25 years’ experience helping sales teams get results.
When I’m not writing articles about sales, I’m providing sales training and sales performance coaching to B2B salespeople, sales leadership coaching to leaders and B2B sales consulting to founders.