Commission Jobs: The Sales Funnel

July 14th, 2011 (9,113 views) by Pinny Cohen

This is Part One of my three part series on Affiliate / Commission Jobs – how they work, and are they worth it. Stay tuned for the next part in the coming days.

We’ve all seen job ads at some point that advertise the “potential” to make thousands a week, only to find the words “salary: commission only” somewhere further down.

We all wonder, can we actually make that money? It often seems like a scam or a company looking for “free labor”. Often it is, but there are ways to separate the good situations from the bad.

First, let us explore why it is so hard to make money in a commission-only sales job.

The Funnel Concept

It is helpful to imagine yourself as a funnel, with all of the customers you are actively engaging coming in through the wide lip of the funnel.

PART A of the funnel:
Here you are selling just one service/product line, so 95% of the people you encounter will never have a use for what you can earn commission from.

For example, you sign up to sell a line of electric toothbrushes. Most people you talk to already have a toothbrush solution, whether it be an electric one or not. The market is saturated with toothbrush brands and types, and you are trying to convince people to buy your specific line.

After a long week of work, you find only about 5 people out of every 100 are interested in an electric toothbrush at this time.

PART B of the funnel:
When you finally manage to get 5% of the people who ARE interested in your product or service, your company only closes a meager 10-20% of them…

So, using some simple math: you only get cash from 1% of your encounters with prospects.

There are many reasons for Part B to be such a low percentage. It could be the company charges too much (building in your commission at the customer’s expense), or has lousy followup, or is out of stock, and so on. The reasons don’t matter as much as the fact that 1% of your efforts are fruitful.

This is why so many commission / affiliate workers quit after a short time – they just can’t make it worth their time. The results are most surprising with online affiliate programs that require a minimum amount be earned before the affiliate can “cash out”. The vast majority of affiliates give up before reaching the minimum, and that results in a lot of free sales for the company running the program.

Next up, I’ll have some tips on how to find a good commission / affiliate job…so stay tuned!

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