I get asked about many issues which come up when a company is considering adding 1099 Independent Sales Reps to their organization:
- Where do I find 1099 independent reps?
- Are they a good fit for my business?
- What should I look for in a rep?
- How long before I see sales?
- Do I need an independent sales rep agreement?
- How to I manage an Independent Rep?
The list goes on and on, and all questions do need to be answered for your team to find success. To start, a brief overview of the industry.
Independent Reps are called many things; Independent Reps, 1099 Reps, Full Commission Reps, Consultants, Channel Distributor, Consultants, etc. Really doesn’t matter …the basic premise of the Independent Rep is that they can make introductions and sales for your product/service, and they are compensated strictly on a % of the sale, they are independent covering their own expenses in most cases and income is reported on a 1099 form for IRS purposes.
Reps will carry multiple lines, so you will never have an exclusive with the reps…..and this is actually a good thing! Most of these reps are already connected in their industries, and can tell you pretty quickly if they can find success or get appointments on behalf of your product/service.
These Independent Reps can be individuals, small regional teams or larger, extremely well-run agencies. Each rep/agency usually has their specialty. They may call in Independent retail or Independent manufacturers, some do large big box, Tier 1 automotive, major OEM’s, large and small distributors, etc. Pretty much there is a rep or agency who specialize in every call point out there. It is important you find reps where your product or service is a compliment to their current business and will enhance their relationships with their accounts.
The US Dept. of Labor estimates there were over 2 Million Independent Reps in the United States in 2016 and that number is expected to rise 6% – 10% annually. This means there is definitely a rep or rep agency who is a potential fit for your product or service. There are many ways and methods to source these reps which I will cover in future postings.
The 1099 industry is a very active and growing segment of business. As health care costs continue to skyrocket, and as companies look for reps who are already connected, this growth trend is only going to continue. Regardless if you are a principal looking to add Independent Reps or a Corporate W2 rep who is considering venturing off to begin their own rep agency, the growth and activity is there.
This was simply a quick overview of what’s happening out there and where the tea leaves are pointing. If you ever have any questions, just shoot me a note at: firstname.lastname@example.org.