Distributor vs Employee Questions

[Anonymous]

I have an interview with a surgical distributor in 2 weeks. Any times of questions to ask to protect myself? I've always been an employee.

I know distributor's skim off the top of your earnings, but other than that, any key questions?

Any tips are appreciated!

 

[Anonymous]

I have an interview with a surgical distributor in 2 weeks. Any times of questions to ask to protect myself? I've always been an employee.

I know distributor's skim off the top of your earnings, but other than that, any key questions?

Any tips are appreciated!

My tip is to not do it, especially since you decided to come to an anonymous forum for tips.

In other words, you show lack of judgement by coming here for advice.

 

[Anonymous]

Seriously, you need to know if the job is a W-2 (employee) or 1099 (independent contractor) relationship.

If it's W-2, you probably know the drill .... salary, commissions or draw, benefits, perhaps reimbursement for some or all expenses, etc. The company controls your schedule, etc.

As a 1099, there are pluses and minuses as well. First, you set your schedule and goals. You may have an assigned territory and product line (more on this later). You are generally expected to cover your own expenses (and benefits, as well as paying taxes, including self-employment FICA). You will want to figure on how much you really need to earn to make the living you expect to earn ... if travel, expenses and taxes eat up a significant part of what you need to live on, you'll need to earn that much more.

You do need to confirm (and formally place in a contract) any geographical or product line limitations. Can others come into your territory/product line and sell your products? That might be a problem (or an opportunity if you can go elsewhere to sell). What rights does the company have to limit, restrict, realign, add other sales people, etc. into any protected territory you might have? What notice must they give you to terminate the relationship? What types of non-compete clauses are involved?

All that said, a 1099 relationship can be very profitable for the contractor and the company ... especially if the company values your contribution to their success and doesn't start thinking about how to take some of that money to the high paid sales rep and put it in their pocket.

 

[Anonymous]

My tip is to not do it, especially since you decided to come to an anonymous forum for tips.

In other words, you show lack of judgement by coming here for advice.

haha ok. Not sure why everyone dog's on people who use this forum, but thanks for the (lack of) advice. Of course, I'm not only using this forum for advice. You show lack of judgement for thinking that this is my only outlet.

 

[Anonymous]

Seriously, you need to know if the job is a W-2 (employee) or 1099 (independent contractor) relationship.

If it's W-2, you probably know the drill .... salary, commissions or draw, benefits, perhaps reimbursement for some or all expenses, etc. The company controls your schedule, etc.

As a 1099, there are pluses and minuses as well. First, you set your schedule and goals. You may have an assigned territory and product line (more on this later). You are generally expected to cover your own expenses (and benefits, as well as paying taxes, including self-employment FICA). You will want to figure on how much you really need to earn to make the living you expect to earn ... if travel, expenses and taxes eat up a significant part of what you need to live on, you'll need to earn that much more.

You do need to confirm (and formally place in a contract) any geographical or product line limitations. Can others come into your territory/product line and sell your products? That might be a problem (or an opportunity if you can go elsewhere to sell). What rights does the company have to limit, restrict, realign, add other sales people, etc. into any protected territory you might have? What notice must they give you to terminate the relationship? What types of non-compete clauses are involved?

All that said, a 1099 relationship can be very profitable for the contractor and the company ... especially if the company values your contribution to their success and doesn't start thinking about how to take some of that money to the high paid sales rep and put it in their pocket.

Exactly the advice I was looking for. THANK YOU.

 

[Anonymous]

Interesting thread.

I agree with the majority of the information set forth by poster anonymous #3, but there is one aspect that was not addressed: Quotas.

Generally speaking, regardless of whether the work offered is straight "W-2," "W-2 + commissions and/or bonuses," or "100% 1099 IC" work, you should also find out what "quota" is required to be met, and if it is reasonable for the geographic area you will be working, regardless of whether there is an assigned territory, or if instead you are free to work any geographic area.

Some distributors set an unrealistic "quota" for an assigned territory before the rep can earn an increased commission structure, or a bonus. The same is true even if there is no assigned territory.

I also totally agree with anonymous #3 when he observes: "Can others come into your territory/product line and sell your products? That might be a problem (or an opportunity if you can go elsewhere to sell).

If you have established accounts ONLY in your geographical territory, and other reps from the distributor can pitch your established accounts, this could have a negative impact. On the other hand, if you have established accounts in many different geographical territories, the lack of an assigned territory can be of tremendous benefit.

Another factor to take into account, which can only be answered by your personality type, is whether you prefer the stability of working a salaried position - but where you can already see your potential growth ceiling. Or, if you would rather roll the dice in a pure 100% IC commission environment, where there is no ceiling on the amount you can earn.

I have heard many horror stories about "quotas." If the rep cannot make quota, the rep is fired. If the rep makes quota plus 5% - 20%, the rep is left to toil away. If the rep consistently comes in at 150% or 200% of quota, I have heard that these reps will have their "assigned territory" split in half, with the old rep having to introduce the new rep to 1/2 of his customers - or the rep is taken out of the field entirely, and instead, "promoted" to being made a manager or a trainer. Either way, the rep who has been wildly successful goes home with less in commissions or bonuses at the end of the year.

If I were you, I would ask to have the distributor set forth in writing their rules regarding territories and quotas. I would also seek to learn if their wildly successful rep gets punished for coming in at way over quota.

Personally, I enjoy working in a pure 100% commission environment - but that is just my personality.

I get to eat that which I have hunted and killed. In other-words, I get to reap that which I sow. It is either produce or starve. I produce quite well, so I eat quite well. Also, I don't enjoy working for any company where I could be laid off in a NY Minute, at the whim of my employer.

For me, 100% commission is the way to go. I can work numerous product lines that complement each other for the specialties of physician I am pitching, as long as there is no conflict.

Good luck.