If you‘ve ever visited an Apple Store, you know the experience is unlike most other retailers. The stores are clean, spacious, and minimalist. The employees are friendly, knowledgeable, and helpful without being pushy. When you‘re ready to make a purchase, the process is simple and straightforward with no high-pressure sales tactics.
As a retail industry analyst and self-proclaimed "picky shopper," I‘ve long been fascinated by the Apple Store model. One key differentiator is how Apple compensates its retail employees. While many retailers pay salespeople commissions for the products they sell, Apple does not. No one at Apple Stores—from sales associates to managers—receives any commissions or bonuses based on individual sales performance.
So how does Apple motivate employees to sell? Why doesn‘t the company use commissions like so many of its competitors? Is this no-commission pay structure good for employees, customers, and Apple‘s business? I took a deep dive to find out.
Apple‘s Compensation Philosophy
To understand Apple‘s stance on commissions, you first have to look at its overall approach to employee compensation. Rather than incentivizing individual sales, Apple aims to provide all retail workers with good base pay and comprehensive benefits that enable a decent standard of living.
According to Glassdoor, the average base pay for an Apple Store sales associate is $19 per hour, or nearly $40,000 per year.[^1] This is well above the national median wage of $15.35 per hour for retail salespeople.[^2] Apple also offers regular pay raises, annual bonuses, restricted stock grants, product discounts, health insurance, 401(k) plans with matching contributions, tuition reimbursement, paid time off, parental leave, and other benefits. Almost all positions are full-time as well.
[^1]: Glassdoor, "Apple Retail Sales Specialist Salaries," accessed May 12, 2023, https://www.glassdoor.com/Salaries/apple-retail-sales-specialist-salary-SRCH_KO0,30.htm[^2]: U.S. Bureau of Labor Statistics, "Occupational Employment and Wages, May 2021: 41-2031 Retail Salespersons," accessed May 12, 2023, https://www.bls.gov/oes/current/oes412031.htm
This generous pay and benefits package reflects Apple‘s core values and brand identity. The company wants to take great care of employees so they in turn take great care of customers. When employees feel valued and have financial security, they‘re more engaged and provide better service. There‘s no pressure to quickly close a sale because their paycheck doesn‘t depend on it. They can focus on giving each customer a world-class, personalized experience—exactly what Apple is known for.
Angela Ahrendts, Apple‘s former retail chief, put it this way: "You start with the right compensation because we don‘t want somebody to have to worry about how they‘re going to put food on the table […] Then it becomes about their career, their development, their opportunities. The compensation is the foundation so that they can put all of their energy into the job."[^3] [^3]: Vox, "Apple‘s Angela Ahrendts on experiential retail, town squares, and why she refuses to do sales," October 19, 2017, https://www.vox.com/2017/10/19/16503076/apple-stores-angela-ahrendts-retail-town-square
Selling Without Commissions
Just because Apple doesn‘t pay commissions doesn‘t mean it ignores sales performance. The company still sets store-level sales targets and expects all employees to actively engage customers and recommend relevant products. But rather than working toward individual quotas, employees collaborate as a team to deliver great customer experiences that organically drive sales.
Apple also has several programs to recognize and reward employees who consistently deliver outstanding sales results and customer service. Top performers receive additional pay increases, bonuses, and other perks. They‘re also first in line for promotions to leadership roles like business manager, store manager, and market leader.
But even without the allure of commissions, Apple employees are still eager to sell. That‘s because they genuinely love the products and believe they can improve people‘s lives. Apple has earned incredible brand loyalty by making products customers adore and building retail environments where they can experience those products in an immersive way. For many employees, it‘s a dream job—even without big commission checks.
"I‘ve never felt like I had to sell anything. I just wanted to share my love for these products with customers and help them find the right fit for their needs," said Sarah, a former Apple specialist who spent six years with the company. "Apple gives employees so much training and hands-on experience with all the new products. We could really speak to how an iPhone or Mac or iPad could make someone‘s life easier in a genuine, authentic way. There was never any pressure to push things people didn‘t need just to boost our numbers."
The Case Against Commissions
Apple‘s no-commission stance bucks the trend of most large retailers, which continue to view commissions as a necessary sales incentive. Best Buy, AT&T, Verizon, Macy‘s, Bloomingdale‘s, and many other chains pay employees commissions ranging from 1% to over 10% depending on the product and profit margin.
Commissions can be quite lucrative for top sellers. According to PayScale, the average retail sales associate at Best Buy earns $2,475 per year in commissions on top of their $12.96 per hour base pay.[^4] At AT&T stores, where commissions are even more central, retail sales consultants average $14,000 per year in commissions, or 30% of their total pay.[^5]
[^4]: PayScale, "Average Best Buy Retail Sales Associate Hourly Pay," accessed May 12, 2023, https://www.payscale.com/research/US/Employer=Best_Buy/Hourly_Rate/a2f57c1e/Retail-Sales-Associate
[^5]: PayScale, "Average AT&T Retail Sales Consultant Hourly Pay," accessed May 12, 2023, https://www.payscale.com/research/US/Employer=AT%26T_Inc./Hourly_Rate/140515eb/Retail-Sales-Consultant
Proponents of commissions argue they properly reward top performers, foster healthy competition, and directly align employee incentives with a retailer‘s sales goals. However, studies suggest commissions can also encourage bad behaviors and create negative outcomes that hurt customers, employees, and the business.
Commissions incentivize employees to view customers as dollar signs rather than people. They may push products customers don‘t need, gloss over important details to close the sale quickly, or even use misleading or high-pressure tactics. Research has found that salespeople working for commissions are more likely to lie to customers than those on straight salary.[^6] [^6]: Ackert, Erwin & Schechter, "Lying for Profits: The Effect of Compensation Structure on Misrepresentation," September 1, 2022, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4200332
Commissions can also make an employee‘s income unpredictable since it depends on factors like store traffic, the economy, product launches, and their own hustle. During slow periods, they may not earn enough to cover basic living expenses. This financial stress takes a toll on employees‘ physical and mental well-being, as well as their engagement at work. Unsurprisingly, turnover tends to be high at retailers with commission-heavy pay.
Apple has largely avoided these pitfalls. Its employees aren‘t distracted or tempted by commissions. They can fully focus on understanding each customer‘s needs, educating them on the products, and allowing them to decide for themselves. This no-pressure approach yields highly satisfied customers who stay loyal to the brand, as evidenced by the company‘s industry-leading Net Promoter Score of 72.[^7] [^7]: Statista, "In-store service experience with Apple in the last 12 months in the United States in 2022," December 6, 2022, https://www.statista.com/statistics/816634/us-apple-in-store-service-experience/
The Proof is in the Results
For Apple, the no-commission strategy has been incredibly successful. The company‘s 270 U.S. stores generate annual sales of $52.1 billion, or $30.4 million per store.[^8] That equates to $7,376 per square foot—more than any other large retailer in the country.[^9]
[^8]: eMarketer, "Apple Stores in the US," June 2022
[^9]: Retail Dive, "Why Apple‘s stores are raking in more sales than any other retailer‘s," November 23, 2021, https://www.retaildive.com/news/why-apples-stores-are-raking-in-more-sales-per-square-foot-than-any-other-re/610401/
These stellar sales numbers are a testament to the effectiveness of Apple‘s retail model and its highly engaged, well-compensated workforce. The company‘s full-time employee retention rate is 81%—far higher than the 60% industry average for tech retailers.[^10] [^10]: Harvard Business Review, "How Apple Is Organized for Innovation," November–December 2020, https://hbr.org/2020/11/how-apple-is-organized-for-innovation
"I can‘t imagine ever leaving Apple unless I had to," said Jeff, a current Apple Store manager in New York. "The culture here is so positive and supportive. Everyone‘s in it together, not trying to one-up each other for a bigger check. We truly care about making customers happy, not making quotas. And Apple takes really good care of us in return."
Of course, Apple‘s no-commission pay structure isn‘t the only driver of its retail success. The company also invests heavily in store design, employee training, product quality, and brand marketing. It has the advantage of an incredibly loyal customer base and products that essentially sell themselves.
For those reasons, Apple‘s exact compensation model would be difficult for most other large retailers to replicate, especially those that rely on a large fleet of stores and a more transactional selling environment. Eliminating commissions could initially hurt productivity without the right training and culture to replace that incentive.
However, Apple‘s example does prove that commissions aren‘t necessary to drive strong retail performance. When a company takes great care of its employees and provides fulfilling work, they‘ll take great care of customers in return. Consistently delivering exceptional, genuine service—not sales quotas—is what truly builds lasting customer relationships and sustainable results.
