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2 Replies Latest reply: Sep 20, 2008 11:43 AM by LUCKIEST RSS

Commision based only sub-contacted employees

MADMAN Newbie
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Is a sub contracted employee commissioned based only for sales better than an actual employee?
and if so what are the liablitys for a sub contracted sale person. What are the benifiets of them being sub contracted? any help with sub-contracted commission based employees would be great.
  • Re: Commision based only sub-contacted employees
    Lighthouse24 Master
    Currently Being Moderated

    If I understand your question, you are considering the pros and cons of a direct sales force (employees who work for your company) versus independent sales reps (contractors who work for themselves). In general, the total cost and administrative overhead associated with employees is much higher, but you have more control over what employees do (and when and how they do it).

    Which is "better" depends in part on the product/service you're selling and the market you're trying to penetrate. If the market doesn't understand your product/service, or if your business relies on repeat sales/orders where an ongoing relationship with the customer is essential, then a direct sales force may be better. If the product/service is straightforward, yet you're having trouble reaching specific market segments, then an independent rep who is already working those segments may be better.

    For your business, I can see elements of each -- so it depends on where and how you're trying to grow. If you need to increase the number of repeat outsourced print jobs, then hiring a salesperson to do that might be the most effective. On the other hand, if you're not currently getting any of the realtor/builder sign market and your strategy to a capture a large percentage of that, then contracting with an independent rep who already already has contacts and customers in that segment would be an advantage.

    Hope that helps. Best wishes.
  • Re: Commision based only sub-contacted employees
    LUCKIEST Master
    Currently Being Moderated
    sub-contacted employees

    Do you have an accountant?? Good question. My understanding is that sub contracted
    people are NOT employees.

    From Wikipedia: A subcontractor is an individual or in many cases a business that signs a contract to perform part or all of the obligations of another's contract.

    A subcontractor is hired by a general contractor to perform a specific task as part of the overall project. The incentive to hire subcontractors is either to reduce costs or to mitigate project
    risks. In this way the general contractor receives the same or better
    service than the general contractor could have provided by itself, at
    lower overall risk.

     

    Hope this helps, LUCKIEST

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