It might seem like a dream come true once you’ve landed your first sales rep position. But once you get the job, you’ll need to know how you’ll get paid. Sales reps’ pay and commission structures differ from salaried positions, and the variability in pay structures can significantly impact your bottom line.
It is essential to understand the different types of commission structures so you know if you’re getting a good deal or if you’re underselling yourself. Once you grasp the different approaches, you can navigate the negotiation process to ensure that you’re earning a wage that reflects your value.
Do Your Research
You can’t understand the value of your offer unless you understand the current comparables in your industry. One of the best ways to do this initial research is to look at MedRep’s 2021 Medical Sales Salary Report. This allows you to evaluate your total compensation and how it stacks up against the current range of positions.
While an initial offer may be several thousand dollars more than your current position, it might pale in comparison to the current base of medical sales rep salaries. Working knowledge of existing pay trends for sales reps allows you to act from a position of understanding and helps you identify when you’ve found a great deal.
However, a high or low base salary may not accurately reflect your bottom line. Sales representatives are frequently paid with a blend of financial approaches that include base salary, commissions, and bonuses. If you miss one of these critical components, you may undersell yourself, drive unnecessary negotiation, or insult your prospective employer.
The current reports show that the 2021 median base salary was $104,649, up 4.7% from 2020, with an average total salary of $172,527, which is a 2.64% increase from 2020. Additionally, women and minorities had double-digit percentage pay increases and also improved the rate at which they were hired for supervisory and management positions.
Dive Into the Numbers
Once you understand the baseline, you can look at various factors that can influence the base salary. While it is tempting to always look for factors that increase the potential salary, you should also consider the realities of your position and identify some of the factors that may reduce your likely compensation package. One of the best ways to do this is to look more closely at the specific position.
First, research the average salary for the position based on the company’s size. If you’ve already received an offer, look closely at the existing company and their competitors for your answers. If you’re just starting your job search, identify the different types of companies you’re interested in working for, and research the salaries they offer for each position.
Once you’ve identified the company’s size and general pay trends, you can better understand its pay structure. Understanding the commission structure, the bonuses available, and how likely sales representatives are to achieve the numbers is essential. While many companies might tout healthy commissions and bonus packages, it can be irrelevant if sales reps aren’t set able to accomplish the attached standards. The best way to determine if the salary they provide is accurate is by reading reviews from employees who have worked for the company.
Once you have all the facts at your fingertips, it’s time to start crunching numbers. Even if a company offers a lower base salary, their commission and bonus structure could have you taking home higher overall earnings than expected. Additionally, sometimes high base salaries mean little opportunity to increase that pay based on commissions and bonuses. This aspect can be challenging to calculate correctly, and the more information you get ahead of time can help you end up with the best deal.
Types of Commission Structures
In addition to simply understanding the base pay, commission rates, and bonus packages, you also need to know how the commission structure is outlined. Many companies vary their commissions based on several different factors. This can include the type of client, whether you’ve earned a new client or are servicing an existing account. Is the commission tied simply with the number of orders or the volume of those orders? How long does the commission stay in effect? Is there a base level of sales required to earn a commission?
Additionally, you’ll need to understand your existing internal and external competition to the company. As a sales rep, you may be assigned a sales territory, or you could be entirely responsible for finding clients anywhere in the world. If you have a region, how many potential clients do you have, and what other companies are also targeting that same market? What are they offering that you aren’t, and what can you do to outperform their current offers to improve your sales?
While the specifics of a commission structure aren’t things that are often up for negotiation, it is vital to take a critical look at them to understand how to negotiate your base salary or other possible job benefits.
Look For Additional Perks
As you negotiate for your position, it is vital to ask about the existing sales staff and how they are performing. While any single sales rep might not be reflective of your success in a position, getting the pulse of how sales reps are supported and rewarded for their contributions is a critical component of your ability to succeed. Ask about how much the most successful sales reps are earning and compare it with the average for all of the sales reps. Additionally, find out how long it takes a new sales representative to work up to the level of the other members of the team.
Some examples of additional perks or benefits can include:
- A company car
- A vehicle allowance
- Corporate gas cards
- Paid sick and vacation time
- Stock options in the company
- 401(k) and matching contributions
Understanding how the company works helps you come to negotiations prepared. When a sales representative demonstrates a knowledge of the existing structure and an ability to navigate the hiring process, it shows that they take the position and their success seriously.
Bring in the Professionals
While many sales reps believe that they can handle everything themselves, they often undersell their abilities and value to a company. MedReps helps you navigate the specifics of the job. We help match you with the correct positions for the right companies and then ensure that you have all of the tools to get the best deal. We keep our finger on the pulse of medical sales representative jobs so that our clients get hired more than any other site online. More than 50% of our clients get a face-to-face interview, and 1 in 5 get an offer.