Commission Sales Rep Myths

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.