For as long as sales have existed, so has the question: how should salespeople be paid? From ancient merchants haggling in open-air markets to modern SaaS reps closing six-figure deals over Zoom, one thing has remained consistent—sales professionals thrive on incentives. The sales commission, one of the oldest forms of performance-based compensation, has shaped the sales profession for centuries. But where did it come from, and how did it become the dominant method of paying salespeople?

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Early Sales and the Birth of Incentives

The concept of commissions has roots in ancient trade. In ancient Mesopotamia and Rome, merchants and traders often worked on a profit-sharing basis. Independent traders would secure goods from suppliers and sell them at a markup, keeping the difference as their earnings. Since there were no fixed salaries, their income was entirely dependent on how much they could sell—a primitive yet effective commission system.

During the Middle Ages, commission-based sales took on a more structured form. Traveling merchants and brokers, particularly those operating along the Silk Road, acted as intermediaries between suppliers and buyers, earning a cut of every successful transaction. Since these deals often required negotiation, product expertise, and risk-taking, a commission model ensured that those who could sell effectively were properly rewarded.

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The Industrial Revolution: When Sales Became a Profession

The modern sales profession began to take shape during the Industrial Revolution. As mass production increased, companies needed dedicated salespeople to move products in large volumes. Unlike small-scale merchants, these salespeople were employees rather than independent traders. To align incentives, businesses began offering commissions on top of base wages, ensuring that salespeople were motivated to sell more.

One of the earliest industries to fully embrace commissions was insurance. In the mid-19th century, insurance agents were almost exclusively paid through commissions, earning a percentage of each policy they sold. This system worked because it ensured that insurers only paid for results—agents had to close deals to make money. The same model was later adopted by real estate, financial services, and wholesale goods industries, reinforcing commissions as the go-to structure for high-performance sales roles.

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The Rise of the Commission-Only Salesperson

By the early 20th century, commission-only sales roles became commonplace. Industries like automobiles, door-to-door sales, and high-end retail saw a surge in commission-based compensation. The psychology behind commission-only sales was simple: it weeded out the weak. Those who couldn’t sell didn’t make money, while top performers earned far beyond what they could in a salaried role. The infamous “eat what you kill” mentality was born, creating a culture that rewarded resilience, persuasion, and sheer hustle.

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The Evolution of Commission Structures

As businesses grew more sophisticated, so did commission structures. The traditional straight commission model (where salespeople earn a percentage of every sale) evolved into various hybrids, including:

• Base salary + commission: Providing stability while still incentivizing performance.
• Tiered commissions: Rewarding salespeople with higher percentages as they surpass certain targets.
• Residual commissions: Common in SaaS and insurance, where salespeople earn ongoing commissions from long-term clients.
• Bonuses and accelerators: Encouraging overperformance with extra payouts for exceeding quotas.

These structures were designed to balance risk and reward, ensuring companies could attract top talent while still driving revenue.

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What Sales Commissions Mean Today

In today’s world, sales commissions remain the backbone of most sales compensation plans. While some industries have experimented with flat salaries for sales teams, results have been mixed—many companies found that without commissions, motivation and performance dropped. Commissions provide an undeniable incentive for sales professionals to push harder, close faster, and maximize revenue.

But more than just a pay structure, commissions embody the spirit of sales itself. They reinforce the idea that sales is a meritocracy—those who work the hardest and sell the most get rewarded the most. This system has stood the test of time for one simple reason: it works.

The next time you cash a fat commission check, remember—you’re part of a tradition that goes back thousands of years. And as long as sales exist, so will commissions. Because at the end of the day, true salespeople always bet on themselves.