An independent sales rep, or manufacturers’ representative, is one of the highest paid positions for talented and dedicated sales professionals. Viewed as independent contractors rather than employees, manufacturers’ representatives work on a 1099 and eliminate the substantial costs associated with employing a direct salaried salesperson, such as benefits, taxes and insurance.
Once an independent sales rep enters into a contract with a manufacturer to sell their products or services
, a commission rate is agreed to by both parties and outlined in a formal sales representative agreement. Though there are some manufacturers that may offer a pay structure that includes a small salary plus commission, typically, independent sales reps are paid on a commission-only basis. This means that all income is exclusively earned from commissions, not from a guaranteed salary. For those not comfortable with their sales ability, relying on a commission based income can be a frightening step. However, for those with the drive and desire to succeed, a career as an independent sales rep can be very lucrative.
Benefits of being a commission-only independent sales rep
Since independent sales reps eliminate the risks and costs associated with on-boarding a full-time employee, businesses are willing to part with higher sales percentages as a trade off. This pay structure provides independent sales reps with the ability to earn a substantial income, one that can far exceed salary-based compensation.
In most cases, manufacturers' representatives can expect to receive commissions ranging anywhere between 5% to 40% from the sales they make in their area. If paid on a ledger basis, an independent rep will receive commission on every sale made in their defined territory, even if the customer directly contacts the company on their own.
Negatives of being a commission-only independent sales rep
Most independent sales rep positions are 100% commission based and include no salary at all. Since payout is directly tied to sales performance, those who are fearful of working without a salary safety net seldom choose this type of career path.
As independent contractors, manufacturers’ representatives also assume the risks that go along with being self-employed. This means that operating expenses, such as insurance, taxes, benefits, advertising, marketing, travel, and office equipment, is the sole responsibility of the sales rep.
How to maximize earning potential
Unlike in-house sales agents, independent sales reps have the ability to sell for more than one manufacturer. Representing several non-competing product lines by several different manufacturers offers the possibility of closing multiple sales at a single time, providing financial security and greater income potential.
In order to truly succeed as an independent sales rep, motivation, dedication, desire, and determination are a must. Without these, the numerous rewards associated with being a manufacturer's representative will not be achieved.
How to get started
If you are a hardworking, independent individual who is confident in their sales ability and performance, a career as a manufacturer’s representative might be the perfect position for you! Start today by creating a high-quality sales rep profile
with us! Your next sales opportunity
is just clicks away!