Most sales jobs provide a salary component and a commission component. Why you may ask? This is because commission is what motivates reps to perform at their best. Let’s be honest. Sales people get paid to sell products. Companies structure compensation plans so that reps are motivated to move product. Most medical sales compensation plans are commission heavy in comparison to other industries. That means lower salaries. Reps get paid to perform in the healthcare sales world. So how does medical device sales commission work?
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Medical Sales Commission
Commission heavy compensation plans are good and bad. In theory, these plans motivate bright and talented reps to work their hardest to bring home the most money. At the same time, these structures can bring out the worst in human behavior. High commission compensation plans are considered go big or go home. This can make reps nervous. Some folks come from industries in which the compensation structure is significantly more salary based.
How Much Commission Do Medical Sales Reps Make?
Let’s do the math. The average medical device salary in 2022 is around $180,000. The base salaries for these roles falls in the $60,000 to $100,000 range. That means the sales commission ranges from $80,000 to $120,000. It ranges from about one half to two thirds of the total compensation structure for most roles. This structure will vary quite a bit between large and small medical device manufacturers. The large companies with established products and large market share can get away paying lower bases salaries, as reps know the products will sell. Smaller organizations with newer products have to pay higher base salaries to attract experienced and competent medical device reps.
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Medical Sales Job Benefits
Salary and commission are not the only compensation factors to consider. There are many fringe benefits in most outside sales roles that are worth considering. This includes health insurance, 401k matching, travel expense reimbursement, and a car allowance or company car. In addition, car insurance and a company phone may be included. In addition, to gym and tuition reimbursement. These fringe benefits available at the big companies can really add up in the grand scheme of things.
How Is Commission Usually Paid?
The standard is for commission payments to get deposited monthly. Like anyone else, medical device reps have bills to pay and commission is a significant portion of their paycheck. Some organizations pay commission out bi-weekly which is better for employees. There is a trend in which some companies are moving towards paying out commission on a quarterly basis. In other words, only four times a year. This can create budgetary and cashflow challenges for reps.
How Are Pharmaceutical Sales Rep Paid Commission?
The compensation structure of pharmaceutical sales roles is very different from medical device sales. Pharmaceutical jobs are more activity and metric based than medical sales. Medical sales is about facilitating the actual purchase of medical equipment. Pharmaceutical sales is more about raising awareness of the benefits of a medication to increase the likelihood it gets prescribed. While metrics do exist to track the effectiveness of sales reps, activity is the name of the game. Therefore, pharmaceutical jobs are typically more salary based. This is good news in that the base salaries for pharmaceutical sales jobs are usually larger than device sales. But the variable compensation is more limited. While there are performance bonuses and other added compensation, it does not compare with what a high performing medical device sales rep can earn.
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Medical Device Sales Commission Percentage
What percent commission do medical sales reps make? Most compensation plans are more complicated than a flat percentage of sales. Though, reps would prefer the simplicity of this model. The compensation plans can get pretty complex and nuanced for manufacturer reps. There are kickers and accelerators and different percentage payments at different volumes based on quota attainment. Commission percentages vary because profit margins vary among different products and in different markets. It can be challenging for a company with a complex salesforce to commit to a flat percentage across a large team. Sometimes independent distributors will operate with set commission amounts for certain products. These reps know exactly how much they will pocket when closing a given sale.
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