Let’s compare outsourced commission-only work-at-home virtual sales teams with traditional W2 teams.
Myths About Commission-Only Reps
- They must not be any good or they would get a salary position.
- They’re desperate so will take any job.
- They’re fast-talking con-artists.
Fact is, many of the most qualified, best performing sales professionals prefer commission-only positions. The main reason is that they know they can sell so that any “risk” associated with a commission-only pay plan is minimal. The upside however is substantially better. This is very rational behavior. They also enjoy more freedom and flexibility in scheduling their work.
Most companies are unwilling to try using ICs fearing this is disallowed by the IRS. It is not disallowed. The IRS publishes guidelines that must substantially be followed. Unfortunately these guidelines are ambiguous and contradictory so the lawyers and accountants take the easy safe way out and advise you not to risk it. Even if you do risk it, the guidelines inevitably cause a complete loss of control of the sales force.
Legally, ICs can do anything they want – come in late or not at all, work other jobs, refuse to turn in call reports or attend training classes and meetings, and so on – and they know it. This is why most companies that try ICs go back to a W2 pay plan. I have developed a unique program that allows me to safely meet state labor board and IRS guidelines regarding independent contractors, while preserving effective control of the team.
Advantages With IC-Status Commission Sales Teams
- Huge savings on payroll taxes and benefits (ICs never qualify for employer group health plans).
- No paying for time not worked – vacations, holidays, sick days, mental health (goof off) days.
- Exemptions from onerous regulations at every level of government.
Protection against frivolous and malicious harassment and discrimination lawsuits.
Freedom from wrongful termination lawsuits which are routinely filed whenever an employee is let go.
- If work-at-home – savings on office space, utilities, furniture and equipment, phone expense, utilities, equipment maintenance and repairs, office cleaning, and more. Can also deploy nationally or worldwide to cover various time zones and markets.
Advantages to Outsourcing Sales to Me
- I can ramp the team size faster to capture your market opportunity before competitors catch on.
- Consistent results since I’m an expert sales team builder, not just a rep that got promoted and never built a team from zero.
- No managing a sales manager or the team.
- Proven ability to maintain IC status and eliminate legal exposure for your company.
- No recruiting costs – job posts, recruiters, time wasted doing endless interviews.