Commission-only looks like free help: you pay only when they sell. The catch is arithmetic. At 10 percent on a $3,000 job, a salesperson needs about 10 closed jobs a month to earn $3,000, and that takes around 200 leads a month if they come from you. Few people capable of selling will work for that without a book of business of their own, and many people who answer the ad are between jobs and need income quickly. The safer setup is a 90-day trial where you supply the leads, set a stop rule, and check the legal side first.
This page is for an owner thinking about paying only commission. It covers the legal check, who responds to the ad, a draw versus pure commission, what you must supply, the trial, and the same job done with software for comparison. It is general information, not legal or tax advice.
Why commission-only looks attractive, and where it fails
It looks attractive because the cost is variable: no salary when sales are slow. It fails for three reasons. A good salesperson can pick among employers, and a pure-commission offer with no leads is the weakest one on the table. A salesperson with no leads spends the first month finding some, so you pay in time, not money. And if the person doesn't sell, you've lost three months and your own best prospects, who got a clumsy first contact.
The legal check to make first
Before you advertise, confirm how this person will be classified. The U.S. Department of Labor states that a worker "is entitled to minimum wage and overtime pay protections under the Fair Labor Standards Act (FLSA) when there is an employment relationship," and that employers must determine classification correctly. Calling someone an independent contractor doesn't make them one; the facts of the relationship decide, and the DOL's rule on this is at 29 CFR Part 795. Commission-only employees may still be owed minimum wage in some situations, and states add their own rules on wages, commission agreements and final pay. Talk to your state labor department, an employment lawyer or your accountant before you post the job. This is the one place not to guess.
Who answers a commission-only ad
Three kinds of people. Experienced sellers with an existing book of customers in your field, who would bring business with them. Part-timers who already have another income and want extra. And people who are between jobs and need money now. The first group is rare and negotiates hard. The second is real but divides its attention. The third needs income in 30 days and will leave in 60 if it isn't there. Decide which you want before you write the ad, and write for them.
The arithmetic on a $3,000 job
Ravi owns a six-person security camera installation company. His average job is $3,000. He offers 10 percent, $300 a job. Suppose, as planning assumptions, 20 percent of leads turn into a meeting and 25 percent of meetings turn into a job, which is 5 percent of leads.
| Leads supplied a month | Meetings (20%) | Jobs (25%) | Revenue | Rep earns at 10% |
|---|---|---|---|---|
| 40 | 8 | 2 | $6,000 | $600 |
| 100 | 20 | 5 | $15,000 | $1,500 |
| 200 | 40 | 10 | $30,000 | $3,000 |
Read the first row. If Ravi supplies 40 leads, a rep earns $600 a month in expectation. Nobody lives on that, so the offer either fails or turns into a salary conversation later. Only at around 200 leads a month does 10 percent reach $3,000. Either raise the percentage, supply far more leads, or accept that this role needs someone who brings their own.
Draw versus pure commission
A draw is a regular payment, say $2,000 a month, treated as an advance against commissions. Pure commission pays only on closed jobs. A draw makes the offer credible and keeps the person around while leads build, but you carry the cost if sales don't come. Ask your lawyer how a draw can be recovered in your state, and put the terms in writing. Some owners prefer a small base plus a lower commission rate: more stable for the rep, a more predictable cost for you.
What you must supply before day one
Leads, scripts, a tracker and a price list. That list is the real cost of a commission-only hire, because without it the person starts from zero. The leads come from you. A first call script and an email they can send. A sheet that records every contact (the layout is in lead tracking spreadsheet). Decision limits: what discount they can give and what they must ask you about. A salesperson who is handed a warm list on Monday sells by Friday.
The 90-day trial and the stop rule
Write the trial into the agreement. You supply 40 leads a month, 120 over three months. Weekly 30-minute review. Stop rules, agreed in advance: by day 30, at least 8 contacts per week logged, or you stop. By day 60, at least 6 meetings held and 2 quotes out. By day 90, at least 3 closed jobs ($9,000). Miss a milestone and the trial ends with no hard feelings and nothing owed beyond commissions earned. At the planning rates above, 120 leads gives 24 meetings and 6 jobs, $18,000, so a 90-day trial with "3 jobs" as the bar is deliberately modest. Track it with the numbers in sales KPIs and project it with how to forecast sales.
The same job done with software
The part of the role that costs the most is finding people and following up, and that is what software does. Rocketship finds the buyers by name, emails them from your own Gmail, follows up, and books the meeting on its own, so meetings land on your calendar without anyone prospecting by hand. Frontier, at $79 a month, allows 500 leads a month, more than the 200 that made the table above work, and a line is $5 a month. Someone still has to run the meeting and win the job: you, or a closer you hire later. Costs and what each option can and cannot do are in a cheap alternative to hiring a salesperson and hiring an SDR, and do I need an SDR or can AI do outbound gives the short answer. If you are weighing a first hire for a startup, read first sales hire too early and why founder-led sales does not scale by hiring.
Before you pay anyone only on results, see what the leads cost you to supply. Rocketship finds the buyers, emails them from your own Gmail, follows up, and books the meeting on its own. Plans that get you customers start at $24.99 a month (Launch), and both Launch and Frontier start with a 7-day free trial, card required. Answering your existing number works on Launch, with call minutes bought as you go ($15 for 50), and a dedicated line is $5 a month.