Undertaking the role of an independent sales representative requires many traits in-order to be successful, the most prominent of which is possessing an enterprising attitude, a desire to control your own destiny and a hunger for greatness.
While it's common knowledge that the self-employed earn more and eventually enjoy a better work/life balance than their employed counterparts, you absolutely must understand both the pros and cons associated with commission-only sales roles.
Here are 5 Reasons Why Independent (commission-only) Salespeople Earn More Than Employees
One thing to bear in mind is that the decision to work for yourself should not be taken lightly, it's imperative that you understand the motivation behind the 660,000+ independent sales reps globally who have ditched their salary and the safety net of a regular wage.
A self-employed agent has to have more desire, hunger and commitment than an employed sales representative. You are not chasing a target set by your boss, you are the boss! - John Northwood, independent sales rep with 42 years experience
Read John's full interview here
Becoming self-employed, regardless of the industry you work in requires you to be in possession of a wide range of character traits such as self-discipline, excellent time management and a propensity for putting in hard graft, especially right at the very start when you're building your sales pipeline.
In return, among the many benefits of working for yourself, independent reps typically receive a higher than average remuneration on the back of each sale, and more often than not include recurring commissions and endless business possibilities that come hand-in-hand with building a diverse sales portfolio.
For companies; it's vitally important to remember that sales professionals who work for themselves incur their own expenses already have strong existing networks of contacts
Types Of Independent Reps
While the principals remain the same, there are a variety of different terms associated with self-employed sales professionals. Here's a brief run down of a few of the main types:
A Manufacturer's rep is a type of independent sales rep that works specifically with manufacturers of physical goods and sells their products to the end buyer. These buyers may be other manufacturers, retail or even working to cultivate a network of international or overseas distributors. Manufacturer's reps may also play an important role in new territory development where the company have no presence and even participate in marketing activities on behalf of the company Principal. Find out more about Manufacturers reps here.
Independent Sales Rep Agencies
A independent sales agency is essentially a conglomerate of independent reps that work together while retaining their autonomy. Doing so enables the rep agency to cross/up sell within their retrospective networks and increase their presence and selling power across larger territories.
1099 Sales Reps
While a 1099 sales rep is exactly the same as a traditional freelance, commission-only rep, you may sometimes see the title of 1099 being used by American reps. This term simply relates to the 1099-MISC form that is sent to the Inland Revenue - instead of the W-2 form which applies to employees - at the end of the year.
So what is it really like being an independent Sales rep?
The Life Of An Independent (1099) Sales Representative
It's important to understand how independent sales representatives work. They partner with multiple companies within their chosen industries and help them achieve their sales goals while at the same building a diverse and lucrative sales portfolio for themselves.
They essentially become an extension of the company's sales force while maintaining their autonomy and to an extent, working within their own jurisdictions and rules. In-turn the benefits that reps bring to the companies they work with include: helping to open doors and develop new business for companies whose in-house teams may have a lack of experience, deep knowledge of the market or having an extensive network of contacts which can be used to close business faster and more cost effectively.
The difference between independent (1099) and employed agents
Attitude. Not everyone can work for themselves. It take a discipline that most people do not possess naturally. Having an internal drive to succeed is imperative to finding clients, working later hours, and building a sustainable business. No independent sales agent can get by with a mediocre attitude. You can ‘get by’. You have to work harder AND smarter. There is no difference being self-employed in the field of sales than any other industry - Joshua Evans, independent business development sales expert
Read Joshua's interview here
Much of an autonomous rep's time is spent building a strong and diverse sales portfolio of products and services that compliment each other. A company should revel in this as their company will be presented to potential prospects on a much more frequent basis than by simply relying on in-house sales staff.
The Rewards Of B2B Commission-Only Sales
Commission remuneration is not the only reward enjoyed by sales professionals who work for themselves.
In order to further understand the benefits of working for yourself you have to understand the aspirations of an entrepreneur. Yes, financial and material gain are an important goal when running a business but also, personal growth and feeling joy when seeing your clients succeed. With each sale, an agent emboldens their own position in the market. It increases the strength of the agent's offering to other clients within the industry or beyond.
It is said that your network is your net worth and for independent sales agents successfully taking a prospect through the sales process, this adds exponential value to their business.
Unless otherwise stated, independent sales representatives work solely on commission. In some ways, ISRs are similar to 'No Win, No Fee' solicitors - the size of their compensation is countenanced by the size of their results.
Commission rates vary depending on the type of products or services being sold. It's important to note that a larger commission percentage does not necessarily mean large profit for the agent - example: 5% of a £5000 product or 20% of a £500 service?
The more successful an agent, the more likely they will receive bigger commissions in future. Each sale builds another layer of trust between agent and principal company.
Do you have experience working with this type of freelance sales professional? Leave us a comment below.
Credit given to Sabian M Muhammad for contributing to this article