How to Negotiate Base Salary in Sales Positions
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Negotiating a base salary is an important part of putting together your sales compensation package. While your job ultimately depends on your sales, having a guaranteed monthly check is important. Negotiating a higher base will not only put more money in your check, it will demonstrate your resolve as a salesperson.
Salespeople are hired to sell, and if you cost the company more than you generate in sales revenue, you will be let go. How much you receive in a base salary will be factored in that cost-benefit relationship by the company, which is why the company will want to keep your base low. The base salary also represents the company's commitment in you, which is why you need to test their desire to hire you. A base salary provides a cushion, especially if the sales cycle is long or if if there are delays in paying commissions. It is difficult to sell if you are worried about paying bills.
If you have a strong track record in sales, then your negotiating position will also be strong. Be prepared to prove your record and have your W2s for a backup. Your value to a future employer is how much revenue you can generate, and if you can prove your value, then negotiating a higher base will be easier. If you have received any special recognition -- top sales rep or rep of the year -- be sure to share that information. If you have sold consistently at or above quota, that will work in your favor, too.
As part of your negotiating strategy, you need to know what the company's current sales reps are earning and how much their top rep earns. Inquire how many are making their quotas. This information will tell you whether the quotas are realistic or not. If selling at quota is going to be extraordinarily difficult, you will need to factor that into your base salary discussions. Find out what other salespeople in similar positions are making, and use that information to negotiate your base salary.
When Base Salary Is Non-Negotiable
You may run into a situation where the base pay is non-negotiable. This is a possible scenario when the employer is a large firm with rigid policies. If the pay scale has different grades -- rep and senior rep, for example -- ask for the higher grade. Another way around this roadblock is to ask for a retroactive pay raise. Accept the position at the lower base. After 6 months, if you are meeting your targets, then you would get a higher base retroactive to your hire date. If these ideas do not work and the company really wants to hire you, ask for a signing bonus to cushion the lower base.
Thomas Metcalf has worked as an economist, stockbroker and technology salesman. A writer since 1997, he has written a monthly column for "Life Association News," authored several books and contributed to national publications such as the History Channel's "HISTORY Magazine." Metcalf holds a master's degree in economics from Tufts University.