Does anyone get tired of being independent contractors? I assume its more beneficial for the guys making big money but if you're not at that level yet, it sucks. With no benefits plus all the costs you incur, is the job even a good career anymore? I also find it hypocritical and strange that the biggest health care company in the world does not provide health benefits to ortho sales reps and instead hides behind the distributorship model and pretends were not employees. Raw deal if you ask me.
Yeap it is tough..but if you feel you are being treated like a w2 employee but are 1099...just fill out the IRS worksheet and see what they say.. Or just call the IRS.. Let them determine it. They will come in and look at your distributor.. If they determine you guys meet the "employee" criteria... Not good for your distributor.. They will have to pay all the back taxes on everyone. Doesn't matter either what your contract states...if they think your an "employee" your distributor is screwed. Don't think others aren't looking into this matter
1099 w/ a sub-S or LLC is always better. It just takes a lot of discipline and knowledge to do it right. The benefits you want from a W2 position are not that great and you are better off with the freedom of running your own business. It is harder to make it work in the beginning, but it is far better in the end.
Take my advice from 30+ year ortho rep: If you are starting out, W2 is always better (insurance, 401k, business expenses and social security payments). The only downside is that you are under complete control of a sales manager. Sales managers are not your friends. If, for some reason you control a $3 mil + territory and you have to decide W2 vs 1099 it is a tougher call. Depends on your age, health and family dynamics. I have remain a 1099 because of the freedom and tax advantages. 80% of a typical ortho sales forces falls into the less than $1.5 mil territories and if you are not a W2 you are getting screwed. Let me preface this, it depends also on what you spouse does. That being said, even as a 1099, I am treated as an employee under IRS guidelines
That's the way I was 'sold' on it. Then I realized how little control I actually had, and that "run your own business" is actually a bunch of bullshit. Why? The investment you are making in that business if yours has no value. You can't sell it, you are simply a rep under a distributor or whoever is above you in the pyramid who is investing nothing in you. Ever wonder how much that distributor is making off 'your' business?
Great post!! Can't speak for Depuy distributors, but my distributor makes a ton of cash from my sales. I invest in my business and do all the right things. At the end of the day, my "own" business is worthless. If I got fired today, my value of my own business would be $0 in a monetary value. The only positive aspect is it keeps me employed for another year.
If your business has no value, you are doing it wrong. The value of my business is my relationships. I could go to a competitor and take my business. It is worth it to pay for my life in pre-tax dollars.
You're lucky if you can take 50% of "your" business. Btw, it's not "your" business when your distributor makes you sign a non compete on that business.
You are doing it wrong. You can negotiate your commission and fight your non-compete. Maybe you bring no value? I'll take 1099 and capitalism any day. Distributors are not feudal lords. You think you have no future w/ a distributor? Try working direct.
Yes. I'm making 10-12%, I pay for my life in pre tax dollars, invest $59k in pre tax dollars, split subreps w/ distributor, and end up paying 15% taxes on gross. Work smarter, not harder. It is what you have left that is important. You could be doing it better.
How much did you have in expenses in 2012? I had gas and a phone. I took surgeons to our corp office, did local cadaver labs, DA hip courses, surgeon dinners, etc. none of that came out of my pocket. I'm not saying all 1099 situations are bad. For instance if you are a distributor for multiple smaller lines, it can be great. You're making 18+%. But if you are a DePuy rep, you can't tell me you would not rather have a 401k match, insurance, expenses paid, not deal w the LLC/SCorp, etc. if you are splitting your subreps after two yrs, you should send your distributor a thank you note, bc you are in the minority. Wait till they cut your rates again after hitting you all w the medtax. Or better yet, start getting real greedy and charging you freight.
this is actually a great CF thread. most are quite dumb. anybody that works for depuy ortho hear anything about returning to direct? every other division seems to be following that model.... and what about commission cuts? Synthes is rumored to be getting one soon...
Every rep for every company bitches about commissions. Maybe you need to sell more to compensate for your already too high paycheck. Bitch bitch bitch.
