Questions About Hiring Independent Sales Reps

[David1234]

Hello,

Thank you for looking at my questions.

I'm a licensed reseller for a high-value software product and I wish to hire independent sales reps to sell it to businesses on my behalf. I want to pay these independent sales reps on a commission only basis for each sale made. I've drawn up a basic contract already in which I state that the would-be hire is to be hired as an independent contractor and not as an employee, that he or she is solely responsible for expenses incurred, and that he or she is solely responsible for all taxes on income earned. I've also included a basic description of the job and a detailed section on how commissions would be paid. Should I add something with respect to the conditions in which the contract may be terminated? If so, what are the typical conditions in which a contract with an independent sales representative may be legally terminated? Is there anything else that I should add?

A separate question:
I'm not sure yet if I should pay a one-time commission or recurring commissions for each sale, however, since I have to pay for my reseller's license in order to maintain it, what would my legal obligations be with respect to paying recurring commissions to any would-be independent sales reps in the event that I chose to cancel my reseller's license?

Again, thank you.

 

[army judge]

First of all, what you make for selling "widgets", "thingamobobs", or any other commodity or service has nothing to do what you agree to pay to those who sell them for you.

Secondly, I would avoid using a contract.
Why put ideas in a person's head?
If you were seeking a salesperson on a "commission" only basis, its counter intuitive to think that such an arrangement implies to the prospective salesperson that he or she might in any way be an employee.
Unless of course, you describe to the prospect in writing the reason's why such an arrangement is something other than as an agent, contractor, etc...

Thirdly, contracts are never perfect.

I would simply solicit for commission salespeople to sell "widgets"
I would make it clear to the person that for every "widget" sold, he or she would receive 10% of the sales amount.

The amount is up to you, and what teh market will bear.

It might be 5%, or it could be $100 for each sale, expenses NOT included.

Whatever you decide, make sure its clear, concise, and a simple written acknowledgement of the arrangement is all I would use.

For example:
Judy Jensen acknowledges in her role as an "independent contractor" selling "Tommy Tomato Software" she is responsible solely for her expenses in pursuit of any sales.

Judy Jensen will be paid 3% of each sale made after the customer has paid in full for the sale of "Tommy Tomato Software" products.

I further advise you do NOTHING until you have consulted with your attorney.
You should also consult with your attorney to not only draft the commission sales agent acknowledgment document, but draft your purchase documents, service documents, SLAs, etc...

This is a business, and you want to project confidence in that business.
That means I'd avoid using documents that were drawn up on a laptop, obtained somewhere ff the 'net.

To proceed as you are headed could cause you much regret one fine day.