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How Much Do Sales Representatives Earn Per Year?

Posted on June 24, 2014 in Business Tips

It can be difficult to pinpoint an average annual salary for sales representatives due to a large number of variables. The exact salary often depends on level of experience, industry, job title and region of the country. Salary.com lists several different sales jobs and how much someone in a similar role can expect to earn. People applying for a position as a sales representative should do additional research on salaries in their geographic location to get a truly accurate salary figure. It is also important to remember that bonuses are a large part of the total compensation package for any sales representative. The positions listed below include base salary only.

Inside Sales Representative

A person in the role of inside sales representative interacts with new and existing customers primarily by telephone. An inside sales representative performs a supportive role for field sales representatives. This position earns an average annual salary of $38,285.

Sales Representative Levels One to Four

Sales representatives are responsible for developing new leads and making sales to current customers. They are assigned a level based on their years of experience and past performance. The average annual salary for each position is:

•Level I: $55,854
•Level II: $67,576
•Level III: $76,099
•Level IV: $119,794

Some employers offer incentive pay only as opposed to a guaranteed base pay. The salary for incentive-based salespeople tends to be lower per year than other types of salespeople. However, people who are highly motivated can earn exceptionally high salaries in a position that pays based on incentive only.

Channel Sales Representative Levels One to Three

A channel sales representative is required to sell the company's products and services to resellers and other sales channels in a specific territory. This position may require an associate degree and one to four years of previous sales experience. Like regular sales representatives, channel sales representatives are promoted to higher levels based on experience and performance. The typical level of pay per level is:

•Level I: $49,045
•Level II: $62,711
•Level III: $98,918

Best Paying Industries and Locations for Sales Representatives

In June 2013, U.S. News and World Report issued a report stating that manufacturers and wholesalers have the greatest demand for skilled sales representatives. The report further indicated that the best-paying industries for salespeople are scientific research and development, satellite communications, securities, pharmaceuticals and commodity contracts. Boston, Massachusetts and Bridgeport, Connecticut are the two cities in the United States where sales representatives earn the highest median salaries.

According to U.S. News and World Report, the average salary for all sales representatives in all locations was $62,720 in 2010. The average annual pay dipped from 2002 to 2004 and has been steadily increasing since that time. Sales managers earned an average annual salary of $101,640 in 2010.

Typical Bonus Structures for Sales Representatives

An article in the Houston Chronicle indicates that the best compensation package for professional sales representatives contains a mixture of base salary, bonuses, incentives and commission. The article recommends making commission the largest part of a salesperson's salary as well as eventually eliminating base salary altogether.

A typical bonus structure awards the sales representative $5,000 for reaching the first identified sales threshold and a set percentage for each new milestone attained thereafter. The gap between each threshold generally gets wider and sales managers must take care not to set too many levels as this could weaken motivation. A grand prize to reward the top performer is highly motivating as well.