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Pay Structures and Going Out On Your Own

Do you work for a company or does a company work for you? Do you have a boss or manager? Are you on straight commission or are you getting a salary too? These are reasonable questions to consider when you think about working in sales. 

Currently, I'm a 100% bona fide self-employed person who works on a 1099 status. That means I am contracted through several companies to sell their products on a 100% commission basis. As such, I set my own hours, I pay my own operating expenses and am, in a nutshell, accountable to no one but myself. It hasn't always been like that though. 

Back in the 1980's I sold office supplies on a B2B basis. I enjoyed it because I didn't have to call on people in there homes as I had done previously selling insurance. The nice part about calling on businesses is that you get to work during "business hours", which means I was usually home in time for dinner. 

That job gave me a small salary as a cushion for the slow weeks, which was great when I was just starting. Based in malls, the company had only sold office supplies and "executive gifts" on a retail basis for years. The position had been created as an experiment one summer and the owners of the company put a part-timer, Ed, in charge of scaring up some accounts. 

He did pretty well considering he didn't have a clue about what he was supposed to do. Ed got in his car, rode around to office parks and introduced himself, the company and the newly created "outside sales" program. In a short few months, Ed opened up about 30 billing accounts, but when the fall semester came back around, he let his employers know that school was his priority.



Disappointed but understanding, the owners of the company asked Ed if he knew of anyone that would like to continue with their new outsides sales program and he suggested me, as we had been roommates briefly and were still close friends. 

I continued to build on Ed's success, but there just wasn't enough room to grow. I moved on to a straight retail job, where I received small spiffs (commissions) from time to time. Again, not liking the future I saw on the horizon, I eventually got back into insurance. 

A couple of the insurance companies I worked with offered temporary draws, like $200 a week, but only for the first couple of months. After that, you were on your own, but they did offer some things like a cubicle and a phone, and of course, the dreaded weekly sales meeting. 

One company had a strange mixture of 1099 and W-2 status called a "statutory employee". I never quite wrapped my head around it all, but some of our sales were taxed and others weren't. The bit that was taxed also had other deductions, like their overpriced medical insurance, as well as FICA. The managers would say that "the IRS doesn't like it but we're not going to let them take the statutory employee status away from you", implying they were on our side somehow.

The problem I had with these guys was the commissions were horrible and the managers required us to show up for all kinds of meetings and coaching sessions. At this point, I had been in the insurance business for over 10 years and in sales for two decades. I broke off from the madness and decided to go totally independent. 

Yes, it can be difficult and even scary. But the truth is, I still do everything the same, minus the sales meetings and "rah rah" sessions. My commissions are higher, my stress is lower and no one tells me what to do and when to do it. The dirty little secret is that people buy from people, not companies. If your clients like and trust you, they will do business with you and not the company behind you, despite what you have been told. 

Don't be afraid to go solo. If you have the skill set, you can be successful wherever you work. 

Chris Castanes is a professional speaker who helps sales people succeed through workshops and humorous presentations. He's also the author of "You're Going To Be Great At This!", a humorous look at sales. For booking information, click here. He's also the president of Surf Financial Brokers selling life and disability insurance in several states.

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