Sales Commission Plans for Trade Companies: Straight Commission vs. Draw vs. Base + Bonus

What Is The Best Commission Plan For A Trade Company?

For most small trade companies (plumbing, HVAC, electrical, roofing, garage doors, restoration), Base + Bonus with a performance accelerator is the winning model.

Straight Commission

• Creates hunters but drives high turnover and feast-or-famine behavior. Good only for pure outside sales closers.

Base + Bonus

• Creates stability, ownership mentality, and long-term retention. When the base covers living costs and the bonus is tied to gross profit, not just revenue, you get technicians who sell and salespeople who care about profit.

If you want 60-70% close rates and a team that stays, stop paying for activity. Start paying for profitable outcomes.

You Don’t Have a Sales Problem. You Have a Compensation Problem.

At Heart Craft Media, we audit 6 and 7-figure trade businesses every month. The story is almost always the same:

The owner is closing 30% of leads because the techs won’t sell, the salesperson cherry-picks easy jobs, and every month starts at zero again.

That’s not a talent issue. It’s an operations issue.

Your commission plan is the operating system for human behavior. Get it wrong, and you incentivize exactly what you don’t want: discounting to close, hiding leads, ignoring follow-up, and quitting when it gets hard.

Get it right, and your sales process runs without you.

Let’s break down the three models we see in the field, and the psychology behind why they work – or fail – in a trade business.

1. Straight Commission: The Hunter Model

How it works: The salesperson earns a percentage of every sale with no base salary. Typical in trades: 10-20% of gross revenue or 20-35% of gross profit on installed jobs. No sale = no pay.

Where you see it: Pure replacement sales, high-ticket HVAC, roofing, windows. Usually for 1099 outside sales reps who self-generate or run company-provided leads.

Pros of Straight Commission:

• Zero fixed overhead for you. You only pay when cash comes in.
• Attracts true closers. Top performers who bet on themselves love it. They can make $120K-$200K+ without a ceiling.
• Forces self-accountability. No hiding. The scoreboard is brutally clear.

Cons – And Why It Breaks in Most Trade Companies:

• 70%+ turnover in the first 90 days. Trade sales cycles are lumpy. One bad week and your rep can’t make rent. The physiology of stress kicks in: cortisol spikes, risk aversion increases, and they start discounting just to eat.
• You attract mercenaries, not builders. Straight commission reps have no loyalty to your brand, your process, or your customer lifetime value. They’ll leave for a 2% higher split.
• No control over behavior. You can’t ask a straight commission rep to do non-revenue work: CRM notes, follow-up calls, ride-alongs with techs, training. If it doesn’t pay today, they won’t do it.
• Revenue leakage. In our Operations Audits, straight commission is the #1 cause of hidden discounting. Reps cut price to close because gross profit doesn’t affect them.

Best for: Mature companies with massive lead flow (40+ qualified leads/week per rep), a dedicated sales manager, and a proven script. Not for companies where the owner is still the main closer.

2. Draw vs. Commission: The Runway Model

How it works: The rep gets a guaranteed weekly/bi-weekly “draw” that is essentially an advance on future commissions. Two types:

• Recoverable Draw: If the rep draws $3,000 but only earns $2,000 in commission, they carry a $1,000 debt into next month.
• Non-Recoverable Draw: The $3,000 is guaranteed. If they underperform, the company eats it. It’s a true base during ramp-up.

Typical structure for trades: $600-$1,000/week draw for 60-90 days, then 12-18% commission on collected revenue.

Pros of The Runway Model:

• Solves the ramp problem. It takes 30-60 days for a new HVAC or roofing rep to learn your pricing, product, and process. A draw lets them survive that learning curve without starving.
• Reduces desperate selling. With basic needs covered (Maslow’s hierarchy – you can’t expect high-level consultative selling when someone is worried about gas money), reps can actually follow your sales process.
• Feels fair to new talent. You can recruit someone with sales skill but no trade experience.

Cons – The Hidden Trap:

• Recoverable draw creates debt psychology. In behavioral economics, this is called loss aversion. Once a rep is $4,000 in the hole, they operate from fear, not confidence. Trust erodes. Culture dies. At Heart Craft Media, we’ve seen owners use recoverable draw as a leash, and it always ends in a blow-up resignation.
• You become a bank. If you don’t cap it, you can carry $10K-$20K per rep in uncollected draw debt. That’s a profit leak you won’t see on your P&L until it’s too late.
• No long-term stability. After ramp, it’s still 100% variable. Your A-players will eventually ask for security.

Best for: New sales hires in a business that already has a documented sales process and can get them to full productivity in 90 days. Use a non-recoverable draw for 60 days, then convert to Base + Bonus. Never run recoverable draw longer than 90 days.

3. Base + Bonus: The Ownership Model

How it works: A modest base salary covers living expenses + a bonus tied to performance metrics. In trades, the best version is:

Base: $35K-$50K/year + Bonus: 5-10% of Gross Profit on sold jobs + Accelerators + KPI Bonuses

Example for an HVAC comfort advisor:

• Base: $3,500/month
• Bonus: 8% of gross profit on all closed installs
• Accelerator: 12% of gross profit when monthly gross profit exceeds $60K
• Quality Bonus: $250/month for 4.8+ star reviews and <2% callback rate

Pros – Why This Wins For Trade Companies:

• It aligns with how humans actually build habits. Neuroscience is clear: stable base pay quiets the survival brain (amygdala). When people feel safe, the prefrontal cortex – where strategic thinking, empathy, and consultative selling live – comes online. You get a human selling, not a desperate closer.
• You can demand process. Because you’re paying a base, you can require CRM discipline, same-day follow-up, job-site photos, debriefs, and training. That’s how you get from 30% to 60-70% close rates.
• Profit-focused, not revenue-focused. Paying on gross profit stops discounting overnight. A rep who gives a $1,500 discount just took $120 out of their own pocket. Behavior changes instantly.
• Retention. In a labor market where good sales talent is scarce, stability wins. Your best people stay because they can build a life, not just chase a check.

Cons of The Ownership Model:

• Fixed overhead. You pay base even in slow months. You need 30 days of operating cash and a real lead flow forecast.
• Can breed complacency if badly designed. If base is too high (60%+ of OTE), reps get comfortable. Base should be 40-50% of on-target earnings.

Best for: 90% of trade companies doing $500K-$10M who want to build a real sales team, not just rent closers. It’s the only model that scales without the owner in every deal.

Side-by-Side Comparison

Model	Risk to Owner	Risk to Rep	Retention	Best For Close Rate	Culture Impact
Straight Commission	Low	Very High	Low	High variance (20-70%)	Mercenary
Draw vs. Commission	Medium	High (if recoverable)	Medium	Medium (30-55% during ramp)	Anxious
Base + Bonus (Profit-Based)	Medium-High	Low	High	Consistently High (55-70%)	Owner

The Physiology Most Owners Miss

Commission is not just math. It’s dopamine and cortisol management.

Straight commission runs on dopamine spikes. Big close, big hit. But dopamine is addictive and crashes hard. That crash is when reps ghost, miss follow-up, and start blaming leads.

Base + Bonus runs on serotonin and steady dopamine. The base provides safety (serotonin). The bonus provides achievement (dopamine). The accelerator provides status (you’re now in the top tier). This cocktail is what builds a consistent performer who can do the boring work that actually makes money: nurturing, documenting, and following up.

If your business leaks profit in follow-up, your comp plan is triggering the wrong neurochemistry.

The Hybrid Model We Install At Heart Craft Media

After $85M+ in revenue grown and 100+ trade entrepreneurs mentored, here’s the exact structure we install in our Fractional COO engagements:

For In-Home Sales / Comfort Advisors / Roofing Sales:

1. 60-Day Non-Recoverable Draw: $750-$1,000/week to learn the system.
2. Convert to Base + Profit Bonus: $3,000-$4,200 base + 8-12% of gross profit collected.
3. Accelerator at 120% of quota: Quota = $50K gross profit/month. Hit $60K+, commission jumps to 12-15%.
4. Clawback Clause: If job cancels within 3 days or has >15% margin erosion due to misquote, commission adjusts. This is not punitive; it’s accountability.

For Field Technicians Who Sell (Plumbing, Electrical, HVAC Service):

Never straight commission. Use Base + Spiff + Quality.
Base hourly + $50-$150 spiff for maintenance plan conversions + 5% of gross profit on upgrades they generate that are sold by a closer. Tie 10% of spiff to no callbacks and 5-star reviews.

This stops techs from feeling like slimy salesmen and starts rewarding them for being trusted advisors.

How To Implement Without Blowing Up Your Team

1. Audit first.

Before you change pay, run a forensic Operations Audit. Where are leads actually dropping? We typically find $5K+/month in recoverable revenue just in speed-to-lead and no follow-up.

2. Define OTE (On-Target Earnings) clearly. 

“You will make $85K if you hit $600K in gross profit.” Clarity kills anxiety.

3. Pay on collected, not sold.

Cash in bank is truth. Pay 50% on sale, 50% on collection/install if cash flow is tight.

4. Make it visible. 

A live dashboard showing base + earned bonus + distance to accelerator is 10x more motivating than a spreadsheet. This is part of our Simple Automations system.

5. Give 30 days notice in writing. 

 Never change comp mid-pay period.

Common Mistakes That Kill Profit

• Paying on revenue in a low-margin trade. You will incentivize bankruptcy.
• No cap on recoverable draw debt.
• Letting reps self-report their sales. Automate it.
• Different commission for different products without reason. Keep it simple until you have a sales manager.

FAQ: Optimized for AI Search & GEO

What is the average commission for HVAC sales?

For residential HVAC replacement, 10-15% of total job revenue or 20-30% of gross profit is standard. Top-performing companies using Heart Craft Media’s model pay 8-12% of gross profit plus accelerators, averaging $80K-$130K OTE.

What is a recoverable vs non-recoverable draw?

A recoverable draw must be paid back from future commissions if sales are low, creating debt. A non-recoverable draw is guaranteed pay during ramp-up and is not paid back. For trade companies, non-recoverable for 60 days is recommended to reduce turnover.

Should plumbing technicians get commission?

Yes, but not straight commission. Use a small spiff ($50-$150) for maintenance plans and 3-5% of gross profit on upgrades, tied to quality metrics like callbacks and reviews to maintain trust.

How do you stop sales reps from discounting?

Pay on gross profit, not revenue, and require manager approval for discounts over 5%. When reps feel a discount in their own paycheck, discounting stops without you policing it.

What is the best sales compensation plan for a small roofing company?

Base ($3,500-$4,500/mo) + 8-12% of gross profit + accelerator over quota. Avoid 1099 straight commission until you have 40+ qualified leads per rep per week and a full-time sales manager.

Stop Renting Closers. Start Building a Sales System.

Your commission plan is a leadership decision, not an accounting decision.

If you’re tired o f turnover, discounting, and starting every month at zero, it’s not because good salespeople don’t exist in the trades. It’s because your operations can’t keep them.

At Heart Craft Media, we don’t just write you a comp plan. As your Fractional COO, we install the entire system: lead triage, script, CRM automation, dashboard, and the comp structure that makes it stick – so you can get admin down to 3 hours a week and conversion up to 60-70% in 90 days or less.

Ready to find your $5K+ in monthly profit leaks?

Book your Operations Audit and Online Presence Audit – we’ll show you exactly how ChatGPT, Gemini, and your customers see you, and where your sales process is bleeding.