14 replies to this topic

[VisageInc]

Does anyone have experience using independent contractors? I am getting ready to hire a couple but I need to find out if a non-compete and non-disclosure is sufficient to protect my business. Do I own their book or do they?

[djoctagone]

Leanne . . .

You may find valuable information in the tags below.

[royster13]

You can have all the legal paperwork you want but at the end of the day if they want to work somewhere else, they will find a way....And the only winners if you get into a fight are the lawyers.....

Do the best you can do to make your folks happy so they stay in place....

[cdemello]

Leanne,
I'm an independent contractor. I've always been of the belief that if I bring a client to the table they're mine. Not that anyone owns a client but that if it didn't work out between me and the company they would not try to prevent me from calling on the same clients that I had when I came into their business. That being said, if they gave me a lead or an existing client (almost never happens) I would think it only fair that if I left the client would remain with the company. This is how I've always worked and I personally would not sign a non-compete. I've invested my own blood, sweat and tears and I would not let anyone dictate what and whom I can work for or call on.
Good Luck.
Carol

[PublicityQ]

The client...

I don't think anyone owns the client. People like to do business with who where they feel they have good relationship and treated well. Some questions to ask yourself

1. Did you know the client before
2. How did you meet - was it at an event where you were representing the owner
3. How is the relationship now - who talks to the client and manages the relationship.

If the clients feel the relationship is with you - the individual or the business.

How well they perceive you calling on them?

[debbiew]

Leeanne, I would LOVE to know how you Found the independent reps you are ready to hire. Everyone I interview seems to have no motivation- they expect the leads along with the pay to come to them. My reps make 50% commission, and no draw. So I am having problems finding qualified people

[VisageInc]

Thank you so much for all of your responses. They have been very helpful and ultimately what matters is keeping your people happy and you don't need to concern yourself with issues like this. I just wasn't sure legally what was true/not true.

Debbie I've been fortunate in finding my new reps through word of mouth. There does seem to be an issue keeping contractors motivated but we are implementing a whole new strategy in 2010 with our current & new reps that I think will get everybody moving!

Enjoy your day!

Leanne

[slalemand]

debbiew said:

Leeanne, I would LOVE to know how you Found the independent reps you are ready to hire. Everyone I interview seems to have no motivation- they expect the leads along with the pay to come to them. My reps make 50% commission, and no draw. So I am having problems finding qualified people

Is that 50% of the gross profit? I ask because we too are looking to add some sales reps, and want to know how most folks are doing this.

Currently my son get 40% of the gross profit on sales he generates and 20% of house accounts, IF he started and finishes the sale. By this I mean, if he contacts them for our monthly specials, and they say no, But we are looking for …, if he takes care of their new need, then I provide him with the 20%. It is a point of contention with us, as he feels he should get a 40% commission on any sale he gets, and I feel, a house account is a house account.

His point is, they might not have called, if he hadn't sent them the sales email, therefore he generated a sale and should be compensated as such.

Yes, he is my son, but I'd like to know how most folks handle commissions, house accounts, phone in orders and such.

Yes HE does handle each aspect of the sale, from taking the order, doing a mock-up, faxing the order in, emailing in the artwork tracking right through to delivery.

A salesman would take orders and that is it, so how should this person be paid?

He or she, would have all of the support needed to succeed, a small allowance for lunches, donuts, fuel, samples, catalogs, self promos and more.

So do you base the commission on invoice or gross revenues?

Any thoughts on this would be very helpful.

Skip

[royster13]

Skip have you looked at how Kaeser and Blair (or the likes) pays their folks?......I am not sure anyone would be happy with 20% to 40% when they can get 50% to 65% (plus perks) elsewhere....

https://kbsignup.com/commission.html

[slalemand]

Thank you for the link. My guess is, that some folks just like having someone else deal with all the bull … involved, and just want a paycheck, so to them, 20% - 40% would be fine.

Setting up shop, dealing with the overhead, is more then most folks want to deal with.

These figures will help. thank you again.

Skip

[royster13]

Karl I do not think you are being realistic.......Say you pay 30% of the gross profit and say the average gross profit is 35%.....So your sales rep makes 10.5% on their sales....So they have to sell 500,000 to make a decent living.....If they were to take all that volume over to K&B (and let them do all the "bull" stuff) they would get 65% of 35% or 22.75% of their sales......How long do you think anyone will stick with you when the grass is way greener on the other side?.....

[slalemand]

Ok. So I guess it's 40% of the profit until they hit a higher percentage of the total sales of the business.

[mgraham]

k-to me it sounds like hes doing a lot admin to cover his 40%. i am a kb dealer and yes they pay a higher % but basically your running your own business. he probably isnt ready for that yet. with kb he wouldnt get any leads either. i dont think your 20% is unfair on house accounts but if i were him i would feel like i should get the full 40% also IF i am doing all the admin like what it sounds. i also think you giving him FREE self promos, catalogs & probably leads that arent house accounts makes your arrangement a little different than kb also. other things to consider is who eats mistakes and non-payments? most reps want nothing to do with these sticky issues but yet want the max payout. lots to consider. i am sure not every rep jumps ship either just cause a big co comes along with a higher comm. rate. my guess is many reps like going to an office, interacting with staff and having someone they can go too with questions. yes big can be good but theres benefits to working with a small family owned co.

being your son i would also think you would be grooming him to someday take over & manage shop instead of worrying about comm. rates. maybe let him hire reps at that 20 or 40% and earn overrides. being family he can obviously be more than just another rep. you dont want him being a competitor and employers normally lose these battles even with airtight agreements. i had one myself and won but when i factored in attorney fees i LOST !! not worth it ...

[slalemand]

Ok. Let me explain a bit as to why it is this way currently.

The sales person, makes cold calls, gets an order:) He brings in the needed information i.e., item number, color, size, shape, quantity … and leaves. We do any mock-ups, faxing the order, emailing the artwork, after creating it, follow-up, and YES eating any mistakes, even if the sales person took down the wrong information or misunderstood.

The sales person get a fuel stipend as well as money for donuts, bagels, lunches. The sales person can get samples for clients, catalogs, B/C's, flyers, catalogs and more all at no charge.

Yes we give bonuses on big orders, and even give bonuses for landing a big account for the first time, even if the first order is a small order.

The account stays the sales persons, and if they call in, email in or fax in an order 2 months later, the sales person gets the commission, even though we do ALL the research and such to close the deal.

Hell, I've handed a sales person a commission check for hundreds more then they were expecting, and when I tell them that some of the folks they landed, have been ordering stuff even though they haven't been stopping by. They like this, BUT, I then ask them to stop by regularly because it appears these folks use more then they thought, and that they may be a lot more sitting on the table waiting for someone to get.

Now YES, you get more from K&B, but you DO a lot more for your money.

Now I'm not adverse to paying more to anyone who is willing to do more of the work on their orders (anything we do for them), heck that frees up more time for us to do other things.

In any case, Thank you all for your input, and have a Safe & Enjoyable New Year.

Skip

[plantia]

I am curious as why the sales rep doesn't do the work and receive commission on any orders received after the initial order?