A career as a sales representative offers the rare promise of both longevity and growth, making it a smart and exciting career choice. And though the job can feel cutthroat, being a sales representative does offer employment stability. In a recent survey, only 4% of sales reps reported losing their job in the last year, and 59% said they had even greater sales success than years before. A remarkable 91% of these respondents are proud to call themselves salespeople.
While these statistics are encouraging, you may be wondering: how much do sales reps make? Keep reading to learn more about the compensation you can expect as a sales representative.
Do Sales Reps Get Paid Well?
A career in sales pays well, and ranks third on this list of highest-paying jobs without a degree.
A sales representative’s earnings are directly linked to their sales performance, which means that a sales career offers excellent earnings potential. In general, sales representative salaries include a flat base compensation and an additional commission based on performance. The average sales professional earns 67% of their total pay in base pay, with 32% in commissions, according to Glassdoor. While the percentages can vary by industry and company, the base salary is generally based on living expenses.
For further reading, check out here the job description for a technical sales representative.
How Much Do Sales Reps Make?
The average pay for a sales representative in the United States is $79,451 per year. This includes an average salary of $52,173 per year, with commissions averaging $27,277 per year. Additional pay may include cash bonuses, commissions, tips, and profit-sharing.
However, one’s income as a sales representative can vary widely based on several factors. Keep reading to learn more.
According to the Industry
A salesperson’s income is greatly influenced by the industry they work in. A more complicated product or service usually yields higher pay since complex products require greater expertise and knowledge. Here’s how sales representative salaries vary across different industries:
Technology
- Average Total Compensation: $81,942
- Average Annual Base Salary: $54,727
- Estimated Additional Pay: $27,215
(Glassdoor, April 2022)
The tech industry is the fastest-growing industry in the world. So it’s no surprise that tech sales can be a very lucrative career (more about tech sales here). San Mateo, CA currently tops the list of the highest-paying cities for technology sales reps.
Medical
- Average Total Compensation: $99,576
- Average Annual Salary: $70,683
- Estimated Additional Pay: $28,893
(Glassdoor, April 2022)
The medical field is a large and complex industry that also offers a high salary for salespeople. Sunnyvale, CA currently ranks at the top of the best-paying cities for medical sales reps. A remote hospital sales representative makes an average of $101,875 per year.
Industrial
- Average Total Compensation: $90,896
- Average Annual Salary: $62,650
- Estimated Additional Pay: $28,246
(Glassdoor, April 2022)
The industrial industry, which sells parts and machinery for manufacturing companies, offers a wide range of salaries due to its scale and diversity. The best-paying city for industrial sales is San Mateo, CA. Nationwide, in-home sales positions are topping the industry, with an average salary of $95,741.
Finance
- Average Total Compensation: $83,998
- Average Annual Salary: $54,006
- Estimated Additional Pay: $29,993
(Glassdoor, April 2022)
In the finance industry, the base salary is usually lower than others, but the commission potential is much higher. San Francisco, CA ranks highest for financial sales reps, and remote independent sales representatives make an average of $119,403 per year.
Advertising
- Average Total Compensation: $89,508
- Average Annual Salary: $59,990
- Estimated Additional Pay: $29,518
(Glassdoor, April 2022)
Advertising likewise offers slightly lower salaries, but with higher commission rates. There is more potential for higher earnings in certain locations, with Lakes, AK surprisingly topping the list. The highest-paid advertising sales job is in global advertising, with an average of $92,359 per year.
According to the Experience Level
Experience level is another factor that affects a sales rep’s compensation. Sales representatives are usually categorized as entry-, mid-, or senior-level. Let’s examine each one and their income potential.
Entry-Level
- Average Total Compensation: $69,497
- Average Annual Salary: $43,239
- Estimated Additional Pay: $26,258
(Glassdoor, April 2022)
An entry-level representative’s income potential depends on their expertise and experience, so be sure to highlight these in the sales rep interview. New sales reps with two or fewer years of experience can easily make over $60,000 in a year.
Mid-Level
- Average Total Compensation: $79,741
- Average Annual Salary: $52,173
- Estimated Additional Pay: $27,277
(Glassdoor, April 2022)
Mid-level sales reps usually have between two and four years of experience, and can make over $90,000 a year as they advance toward senior-level positions.
Senior-Level
- Average Total Compensation: $212,673
- Average Annual Salary: $173,966
- Estimated Additional Pay: $38,707
(Glassdoor, April 2022)
Senior-level sales reps, typically with five to seven years in the industry, are the most experienced at sales development and usually make the most money. Executive-level salaries in sales can reach impressive amounts, topping $375,000 a year. These executive-level representatives are also leaders in management, filling roles such as Vice President of Sales.
According to the Compensation Structure
Sales representatives can be paid in different ways. The most common types of compensation structures for sales reps are:
- Salary only
- Base salary plus commission
- Commission only
Each compensation structure has its own perks and drawbacks. Let’s take a look at each one.
Salary Only
A salary-only compensation structure provides salespeople with a fixed salary. This compensation structure is relatively rare in sales. Without commission, reps are generally less motivated to exceed their quotas because they have no incentive to.
Perks:
- Steady, predictable income
- Less stress
Drawbacks:
- Less motivation to exceed quotas
- Lack of earning opportunities
Base + Commission
With a base salary plus commission compensation structure, you’ll receive a set salary every year, but with additional earned commissions based on your sales. According to a recent survey, this is the most common pay structure, with 48.8% of businesses offering base salaries and commissions.
Salary percentages depend on the company, industry, and sales position. The standard salary-to-commission ratio for sales is 60-40, meaning employees receive 60% salary and 40% commission.
Perks:
- Guaranteed income
- Increased earning potential and performance rewards
- Opportunities for growth
Drawbacks:
- Low salary
- Slightly less incentive to make sales than in a commission-only structure
- Complicated structures can cause confusion
Commission Only
Sales reps who are only paid a commission are only compensated when they make a sale. This isn’t the most common pay structure. Only 11.6% of companies pay their employees exclusively in commission. There are several types of commission-only structures, including:
- Straight Commission: Sales x Commission Rate = Income
- Residual Commission: Payment x Commission Percentage = Total Commission
- Revenue Commission: Sale Price x Commission Percentage = Total Commission
- Territory Volume Commission: Sales Totals x Commission Percentage / Number of Salespeople = Commission Total Per Person
Commission-only compensation may be optimal for experienced salespeople working in lucrative industries or locations. Although there isn’t a guarantee of a regular salary, the income potential of even a single sale is enormous.
Perks:
- High sales and earning potential. When salespeople are paid for success, they work harder at closing deals and, in turn, have more potential for earning high commissions.
- Reduced costs. Managers can control labor costs or maximize sales efficiency by only paying workers for what they accomplish.
Drawbacks:
- Unpredictable income. Market conditions and failed deals can lead to an inconsistent income without a salary guarantee.
- Higher risk. You may be viewed as a higher risk by banks when qualifying for loans.
How Can You Increase Your Earnings as a Sales Person?
A career in sales has excellent upward mobility. There’s plenty of growth potential for sales reps to rise in the ranks and maximize earnings.
Advancing doesn’t have to mean working long hours. Think strategically instead. These three strategies will help you earn more:
Specialize
When planning your career as a salesperson, consider specializing in a specific role. Specializing divides the functions of the sales process into individual tasks. The four core sales roles are:
- Inbound Lead Qualifiers (Sales Development Reps)
- Outbound Prospectors (Business Development Reps)
- Account Executives (Closers, Sales Reps)
- Account Managers (Customer Success Reps)
Many fast-growing companies are making specialization a key strategy, as it results in greater efficiency and productivity. Lead generation strategies increasingly rely on sales specialization, so stay on top of this growing trend.
Close More Sales
Increasing sales is an obvious method of increasing your income as a salesperson. It’s easier said than done, but there are several ways to close sales and boost revenue. One is to focus your lead generation efforts to target more significant deals. Landing a few big sales can result in big commissions. Alternatively, you can sell more to existing customers. Cross-selling and upselling are both effective ways to do this.
Change Locations
Finally, if you want a better salary as a sales representative, you might consider moving. You can potentially make more money in a new place by raising your income, lowering your expenses, or both. These are the top-paying cities for Sales Representatives:
- New York City
- Washington DC
- San Francisco
- Boston
- Minneapolis
- Chicago
- Los Angeles
- Seattle
- Atlanta
- San Diego
FAQs About Sales Rep Salaries
Still have questions about sales rep compensation? Here are answers to a few of the most commonly asked questions.
What Is a Good Commission Rate for Sales?
Each industry has a different standard for commission rates. For example, real estate agents typically earn a commission of 3-6% of the total sale price, while car salesmen usually earn a commission of 10-15%.
What Is the Best Industry for Sales?
Concentrate on service-oriented industries or high-margin products sold to businesses rather than consumers. While compensation varies based on experience, specialization, and employment location, several sectors can pay six figures, including:
- Consulting
- Consumer packaged goods
- Digital media
- Medical devices
- Software sales
Can Sales Reps Make Six Figures?
Yes. A six-figure income is possible with hard work and dedication. Achieving such a level of income means developing solid sales rep skills, closing big deals, and consistently meeting your quotas.
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