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    7 Replies Latest reply on Jan 13, 2008 11:21 AM by aallc01

    #3 What documentation would I need?

    spiderman Newbie

      In an ongoing quest to find the answer to a very detailed question, this is the third in a series. The previous posts, I have outlined the need to hire a commission based sales staff and what compensation should be awarded. This question I ask is about the legal documentation required for commissioned based sales people. I do not want leave Just Math vulnerable to any liability from payroll taxes or other statutory obligations. Of course, we will seek the advice of an attorney and CPA prior to moving forward.

       


      This question is - is it legal to pay a commission only pay structure for outside sales?
        • Re: #3 What documentation would I need?
          LUCKIEST Guide

          I think that you have answered your

          question.
          Is it legal to pay a commission only pay structure for outside sales?

           

          We will seek the advice of an attorney and CPA prior to moving forward.
          Again Good luck, LUCKIEST
          • Re: #3 What documentation would I need?
            Ed O'Gee Adventurer
            Yes it is legal but you are not hiring employees, you are seeking independent sales reps, meaning they can sell your products and anything else. An independent sales rep will negotiate for a percentage of every unit or total sales of what they sell for you. You may also have reps that want reimbursement for travel and other expenses. The benefit for you is low overhead, no payroll taxes and you need only to produce 1099's for the guys that sell for you. The bad news is that the sales reps are not dedicated, the only real incentive to sell is the commission possibility. However, if your product has a long sales cycle or small margins, you may not attractive very good independent sales reps.
            • Re: #3 What documentation would I need?
              LUCKIEST Guide

              Spiderman, Questions about "commissioned based sales people"

               

              Will ALL of your sales representatives delivering a consistent and satisfactory sales performance?

               

              Do
              you know how to measure each rep's sales performance? .

               

              Do you know how to communicate with your sales force in order to keep them enthusiastically selling?

               

              Hope this helps, Again LUCKIEST
              • Re: #3 What documentation would I need?
                CorpCons08 Ranger
                What is the need for a sales staff?
                According to your profile, you are a non-profit after school learning center.
                You could easily gain students to your center just by advertising with school districts.
                You really aren't going to have a sales staff going door to door to schools soliciting students are you?
                • Re: #3 What documentation would I need?
                  aallc01 Wayfarer
                  It is absolutely very legal and simple. You need to set a program that is results only oriented. I represent two companies that pay me on 100% commission. The sticky part is how do you pay just fro referrals, shared opportunities and full closure of deals. You need to outline all that!
                  I can help you with the set up and organization you want to create.
                  Let me know how I can assist you.