What are the pros and cons of paying out sales commissions in a one-time payment, instead of a residual model

VICINANZA: From a cash-flow perspective, many resellers would rather pay out in a residual model because that matches the payout to the income. It's a lot easier to write a check from a check. But I don't think there is one right way to do it.

On the plus side, doing a big payout is a huge boost for the salesperson, and it's in line with the expectations the current salespeople have for how they get paid and it's very clean and easy to administer.

The disadvantage is you’re paying before you have the cash flow, so that requires some financing to make that work. It also does nothing to tie the salespeople to your company. Salespeople tend to be a lot more loyal when having a steady paycheck of commissions coming every month that they will lose if they jump ship.