Does The Term "Independent Sales Contractor" Exist?

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Does The Term "Independent Sales Contractor" Exist?

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NorthCountryDesign

posts: 100

Jul 03, 2009 9:26 AM ET Quote

Points: 0 Vote

So, I`m at the point in my business where I think it would be a good idea to get a salesperson. I want them to be a contractor and -not- an employee.

I wanted to offer a 30% commission-only based position for 30 days. At the end of that 30 days we can review / extend the contract.

Would this type of contract / sales position remove the need for me to actually call someone my employee?

-------------------------

Shawn R. Tooley
North Country Design
87 Lisbon Street
Heuvelton, NY 13654
Phone: (315) 307-3359
Email: shawn@northcountrydesign.us
Web: http://www.northcountrydesign.us

mmdona

posts: 58

Jul 03, 2009 11:05 AM ET Quote

Points: 0 Vote

The IRS, at http://www.irs.gov/businesses/small/article/0,,id=99921,00.html, has guidance on the difference between independent contractors and employees.

Molly Donaldson

NorthCountryDesign

posts: 100

Jul 03, 2009 2:21 PM ET Quote

Points: 0 Vote

Thanks Molly, I read through their prior to posting my question and wasn`t clear on an answer... so I turned here to people who might have more insight on my particular situation.

Would the type of contract / sales position I listed above remove the need for me to actually call someone my employee?

Thanks in advance for answering the question.

-------------------------

Shawn R. Tooley
North Country Design
87 Lisbon Street
Heuvelton, NY 13654
Phone: (315) 307-3359
Email: shawn@northcountrydesign.us
Web: http://www.northcountrydesign.us

kathleenfasanella

posts: 103

Jul 03, 2009 2:46 PM ET Quote

Points: 0 Vote

You`re looking for an independent sales representative. By tradition, they work by contract.

-------------------------

~Nurture people, not products~
http://www.fashion-incubator.com

patentandtrademark

posts: 1305

Jul 03, 2009 4:28 PM ET Quote

Points: 0 Vote

Whether somebody is a "contractor" is basically about control of the work. The IRS has tax regs and each state has its own rules.

-------------------------

James Lindon, Ph.D. Patent Attorney
Lindon & Lindon, LLC
Cleveland, Ohio
Patents, Trademarks, Copyrights, Pharmacy Law, Litigation
[this is not legal advice - provided for discussion only]
Intellectual Property for the Individual and Small Business: Identify, Protect, Enforce, Defend.
"Fools rush in where angels fear to tread."
http://www.LindonLaw.com

mmdona

posts: 58

Jul 03, 2009 5:47 PM ET Quote

Points: 0 Vote

Shawn,

The three questions to determine if they are a true employee are:

1) Does your company control when, where and/or how work is done?

2) Does your company provide the tools and supplies the worker will use?

3) Does the worker work only for your company?

You are probably ok on 1 & 2, but number 3 may be the issue in your case. IRS regs are typically that the person is an employee unless you can prove that they are not.

Best regards,

Molly Donaldson

NorthCountryDesign

posts: 100

Jul 03, 2009 7:13 PM ET Quote

Points: 0 Vote

I actually found a really great contract template for a Independent Sales Representative. I`ve edited the contract to my terms and I`ll have an accountant / lawyer check it over.

At my last Chamber luncheon I was speaking with a local accountant who told me that all of my workers should be independent contractors until I want to actually take on employees - and hopefully this will solve my problem of needing sales people based on commission vs. hiring them as employees.

I really do love this community. I just hope that I can give as much back as I receive here. As I learn more hopefully I can share of my my own experiences.

-------------------------

Shawn R. Tooley
North Country Design
87 Lisbon Street
Heuvelton, NY 13654
Phone: (315) 307-3359
Email: shawn@northcountrydesign.us
Web: http://www.northcountrydesign.us

nevadascul

posts: 487

Jul 04, 2009 4:47 PM ET Quote

Points: 0 Vote

You might be better off contracting with a professional sales rep company for your type of product rather than hiring an independent contractor. These firms represent multiple companies and are paid a percentage of what they sell in their service area.

There are two main advantages to these types of companies. First, you don`t have to worry about IRS rules. The person you will deal with will be an employee of another company. Two, since these sales rep firms represent multiple companies with compatible products, you get greater product exposure without increase cost.

I used to work in the door hardware industry for example. Our company contracted with professional sales rep. She was a sales representative for a door manufacturer, door window supplier, floral designer for entry ways and our company. Every time she did a sales call for one of the other companies, she would work our product lines into the converation. If she was going on a sales call for us, she would suggest the potential client buy doors from her door supplier. This resulted in greater exposure of our product without any increase in our sales contract cost. She also fed leads to us she received while repping her other product lines.

This is just an ideal you might want to think about.

-------------------------

Goals are attainable at any age. It just seems to take longer the older we get. - S. Patrick Culshaw

shaffali

posts: 1

Jul 27, 2009 4:51 PM ET Quote

Points: 0 Vote

Hello Shawn,

Would you be able to share where you found a really great contract template for a Independent Sales Representative? - I am in a similar situation and would appreciate the resource.

Thanks!
Shaffali Miglani

Shaffali Skin Rituals
shaffali@shaffali.com
646.306.8600

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