The Rep and the Principal

“Byron” is one of the most prolific sales agents of telecommunications products and services in the country. He had previously served as a sales agent for a major publicly traded telecommunications industry leader.

“DCA” is a company that provides telecommunications products and services to customers in several states. Before 2010, DCA was a small company with a few million dollars of annual revenue primarily serving individuals who resided near its primary office location. It had no major corporate customers.

“Karl” and his brother “Sam” founded DCA in the 1990s. Karl and Sam had poured decades … Read the rest

A commissioned sales representative called me recently with the following situation: Beginning in 2011, the agent served his pharmaceutical company as a commissioned sales representative on an independent contractor basis, receiving from the company a Form 1099 annually. The agent had a well-written, reasonably unambiguous contract with the company entitled “Independent Sales Representative Agreement.”

The agreement included standard terms that one would expect to see in these circumstances, such as the duration of the parties’ arrangement, the economic provisions addressing the sales commission percentages payable to the agent, when sales commission payments are owing to the agent, the agent’s geographic … Read the rest

A naturally skilled product promoter based near Detroit, “Larry” served several different manufacturing company principals as a commissioned sales representative for more than 20 years.

The commissions that Larry received on product sales he procured generally varied between two and five percent of net sales, and he generally earned around $100,000-$200,000 per year. Larry had an undergraduate degree in finance from Michigan State University, an impressive Rolodex of purchasing department contacts at most Original Equipment Manufacturer (“OEM”) automotive companies operating in and near Detroit, as well as their tiered suppliers, and the quick wit and big smile that most successful … Read the rest