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What Are The Pros And Cons Of Using A 1099 Contractor For Sales?

 

There are several ways that a sales management team can use a 1099 contractor to their advantage, but they need to balance these potential advantages with the drawbacks of using this type of service.

Pros

They don’t sell, you don’t pay – a rare instance in the sales world. Their performance is gauged based on the sales they make.

You are also dealing with an entrepreneur, who has some level of business acumen, because they are running their own deal. They may have some existing sales relationships, which can help you sell your lines and your products through them.

They may have market penetration already established and existing customer relationships. This helps to make sure your product or service reaches a high volume of potential clients in an expedited manner. Your company does not have to make an investment in training, hiring, coaching, developing or leading, and the expenses that go into making representatives an expert in the sector will be eliminated.

Cons

Loyalty becomes an issue, as independent reps are going to go where the money is. Whatever they can make the most money on, either by volumes or margins, that is where they are going to sell.

They are going to sell what is easiest. If you have a hard product to sell, even if the rewards are good, a lot of times they will go for ease and volume. You might not sell as much because they will not be as dedicated to your company as one of your reps.

They are selling other people’s stuff, and you may not be their exclusive or priority customer.

You don’t have as many controls. They are not an agent of your company, as they are independent and have a lot of flexibility. They will likely not represent your company with the same level of integrity that you want them to. These reps are operating outside of the bounds of your corporate policies and core values.

In some cases, it can work very well. There are successful independent representative companies, and it works for manufacturers who do not have the resources to create their own sales staff.

There is likely no continuity between this type of rep and the company, and they may be selling something in a way that is difficult for customer service people to support.

A sales management team should examine both ideas and determine which method works better for your company. You may have to try things in order to make the best possible decision.

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