The Advantage of Using 1099 Independent Sales Reps

Companies, both big and small must always focus on increasing sales if they want to stay in business. Competition is fierce among competitors and only those that stay on top of their game survive. The key to a successful business always comes down to sales. You can have the greatest product ever invented, but, if you have no sales, you will quickly go out of business. So, the question comes up as to the best strategy for promoting your product or service.

There are many large companies that rely on an in-house sales staff to drum up business. Maintaining a strong in-house sales force can be expensive because you have to pay salaries, insurance and other benefits as you would with any other employee. You incur high costs before you may see any positive results. An alternative to having an employee-based sales team is to have outsourced sales driven by independent sales reps.

In today’s economy, many businesses do not have the means to support a full-time sales staff. They certainly want to do all they can to attract new business, but they must be a little more creative. Setting up an independent sales force that will accomplish the same goal of increasing sales and bringing in new customers is not as simple as it may sound.

Depending on the type of company or business you are running, an outsourced sales force may or may not be appropriate. For instance, if you have a very specialized product where technical knowledge is essential and your sales people must be very fluent in all of the latest technology; it can be very difficult to find qualified independent sales reps that can handle the job. A company may need to hire and thoroughly train a sales force so they can effectively present the company’s products before potential clients.

On the other hand, field sales can easily be handled by well rounded independent salesmen that have experience in a number of different areas of sales. If you can sell TVs, mattresses or payroll services, you probably can sell air-conditioners, tires or cell phone services.

An independent sales rep is almost always paid on commission. When he or she brings in business, they are paid an agreed upon commission. Instead of receiving a W-2 form showing their taxable income, an independent sales rep receives a 1099-MISC form and is considered an independent contractor who is responsible for paying their own Social Security and Medicare taxes. In return for giving up control over the sales rep, a company is not forced to pay taxes, insurance, healthcare or other benefits, all of which can add up to a substantial sum of money.

Another advantage of hiring independent sales reps to drive company sales is that they often cover territories that do not get covered by an in-house staff. Some independent salesmen may have 5 or 10 different product lines they represent and run in very different circles than would normally be associated with your business. Their contacts can be invaluable for generating new business. As long as you find a competent professional, both big and small businesses can benefit by engaging the service of an independent sales representative.

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