You say you're in a fiercely competitive market but you don't say how much you're willing to spend on keyword ads per month. IMO, targeted keyword advertising campaigns are the only way to drive traffic to a new site. And you need to be prepared to pay a knowledgeable person up front to do the required leg work of analyzing various combinations of keywords & phrases that will yield the most bang for your buck. This takes much preliminary research and several weeks or months of trial and error testing before hit traffic reaches the levels needed to match your conversion goals of 4-8 sales per day.
I might add, it isn't enough to saturate the search engines with ads in the most expensive/competitive categories. It is often better to buy several less expensive keywords and combine them appropriately with regional keywords to elicit hits from a narrower but nevertheless interested pool of potential customers. This is where SEO gets complicated and time consuming. Moreover, formulas that work well during the winter months may not produce the same results in the spring, summer or fall. So there is a need for constant monitoring and juggling.
I don't know what your experience is, nor do I know what market you're in, but I tell my regular customers to be ready to spend at least $1,000 per month on ads for the first year, perhaps longer. Naturally, my fees are extra. If I feel the campaign is working as it should, I might leave it alone for a few weeks. If it isn't reaching high enough, I might make adjustments every day or seven times a day. In any case, you would be paying for my particular service and expertise. It doesn't matter if I'm working 5 minutes per day or 50 minutes per day on your site. That isn't your concern.
There needs to be a division of labor. The SEO person's job is to drive targeted traffic to your site. Your job is to convert that traffic into sales. If you're not doing your job correctly and potential customers drop-off before completing the sale, why should the SEO person be penalized? Sorry, but I don't think any SEO person worth their salt will accept your promise to pay on commission. If you want to pay on commission, hire affiliates.
I have to admit I never really considered the paid ads up front due to costs. I did something similar with Overture about 5 years ago. Spent 15k in 1 year with no improved results. Of course this could of been for any number of reasons.
Back to my current project. I see my competitors buying ad space on Google, yahoo, etc, but most of the standard search results are blogs leading to the same corporations that have sponsored results. There isnt pages and pages of competitors (Direct link or blogs) crowding the standard search results. Only a few at the top on the 1st page. Problem is my keyword meshes with other things, sort of like the BING commercials. Say you are searching for an MP3 player to buy and the search results get flodded with not only mp3 players, but ipods, mp3 player accessories, mp3 download sites, etc. if you type in a specific model, like a Microsoft Zune MP3 Player 30 GB, then you get your more specific results. My situation is that specific, but crowded because the word zune, in this example, has so many other sites related to it that after the relative few, it make a tangent off to non desired results. I need to get above the non desired results.
To take a step back from my previous statement, I dont care what the hours are that someone works. If they are driving in the traffic, then they are driving it in. The bottom line speaks volumes. Is it wrong to have an SEO person work on the site as well? Of course not and I welcome it. I am aware that results can take months to happen and there has to be a bit of a yin/yang relationship.
The bottom line is the money part. Perhaps I am looking more for of a results oriented partner. The concept works as I make a living off it in the local market place and have been for 6 months. If I am willing to pay someone $ 25 per sale with a push to get at minimum 4 per day, I frankly have to ask what SEO person would not want to jump in with that.... assuming they view my concept as sound. I ask this not to sound sarcastic nor is it directed at you ( as I dont know you ), but do you have anyone that pays you $ 700+ a week for SEO and web work? Once the ground work is layed, this will move on to other product with the same concept.
I apprecaite your detailed response. I am open to any other concepts or suggestions that you may have.