Salary
This is a flat rate, paid in weekly, fortnightly, or monthly increments; increases only when you get a raise, usually only once or twice a year. Advantages-dependable. You always know from month to month what your financial baseline will be. Salary varies with the job, the company, and their expectations of you. An entry-level salesperson typically will get from $25,000 to $35,000 to start. Someone with around 5 years of relevant experience and a good track record should look for $45,000 to $75,000. A senior sales rep with a good track record of sales should expect from $65,000 to $120,000 annually. If you're in a hot industry (software is big right now), you can make a lot more.
Commission
This is a percentage of the revenue income that you bring into the company through your sales activities. Avoid a "commission-only" position, particularly if you're just starting in a job. Usually it takes several months to establish a client base in a new position and get sales revenues up to a meaningful level. If you receive only commission, you'll be working for very little income (sometimes no income, if the company has a revenue cap that must be exceeded for commission to kick in) until that point.
As you become established, commissions are a good way to go-it gives you a way to determine your own income, based on your selling skills, the amount of time you put into the job, and the real value of the products you're selling.
Commission-only settings are best left to the seasoned sales reps, who have a realistic idea of their sales abilities, an established client base, and can continue to sell successfully month after month. But even as a beginning sales rep, you are bringing value to the company other than revenue. You're advertising for the company that hired you, and you're building client contacts and name recognition for the company that will last long after you are gone. Because the company gains intangibles from your activities, it should pay you some baseline salary that underlies your commission, to keep you going until the commissions start.
Base salary
This is the minimal amount people on a commission plan get from the company, on a regular basis, to handle basic support. This is usually anywhere from $25,000 to $60,000 annually. Commissions add on to this.
Draw
This is an amount of money a company gives you to get you started. Be very careful-it is only a loan and will be repaid out of your commissions (when they start), or, if you quit, is often repaid out of your pocket. When a company uses a draw to get you going, you're essentially working for free, as in the commission-only scenario. This is rarely a good idea.
Bonus
This is the happy event that happens on an irregular or regular basis, and is a reward for doing something particularly well-exceeding your sales quota, landing a particularly good account, or helping the entire team have a good sales period. Bonuses are a great incentive-they're a slug of cash all at once, and really perk up your day! Always ask, when you're hired, if your plan includes a bonus and how you can qualify for it.
Perquisites
These are the nifty little "gimmies" that are nontaxable, non-reportable (by you), and make life nicer. Examples include a company car; a gasoline credit card for which the company pays; a cell phone for which the company pays; a laptop or desktop computer that the company buys; an expense account; and so forth (like the right to keep all your frequent flyer miles, which can translate into neat, cheap vacations).
The best part is that Uncle Sam gets little or none of this stuff because it's not really cash, and it's not really given to you-you're just using it to do work for the company. It is important to remember that perqs should never be abused, or they can disappear (often, along with your job). Don't use your car phone to order take-out pizza or use your company credit card to take your mom to dinner. However, you CAN use your credit card to take a client to dinner-as long as you discuss business during that time.
Similarly, you cannot drive the company car across the country for a family reunion without reporting this as "income" on your taxes (and, to the company, as "personal use," if that is allowed), but you can use it to drive to another city to visit a client and (happy coincidence!) your best friend, who happens to live in the same city. Be smart, be honest, play by the rules, and this all works out wonderfully.
Extra Option
Some firms, particularly start-ups, can't afford a senior sales rep but truly need one. In this case, they may offer stock or partial ownership in lieu of a juicy salary. This is a judgment call-you're gambling that the company will become hugely successful and you'll make your money back in spades. Go with your gut feeling. If you think this technology is the greatest thing since crunchy peanut butter, then do it. However, if it's a "me, too" technology, is half baked, or otherwise smells a little whiffy, politely decline. Cash in pocket is often better than founder's stock that matures in 7 years (and in which you vest in 5 years); you're betting today's earnings against stock performance 5 to 10 years in the future.
