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Financial Forum Have a question or advice regarding financial planning, retirement planning, buying a house, taxes, etc.? Try it here. Remember, please use this forum as a starting place for information, but please remember to consult a financial professional before making serious financial decisions. Please also remember that none of the message boards should be used for advertising or other business solication.

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  #1  
Old 12-13-2008, 12:30 PM
jtgator jtgator is offline
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Default 1099 or W2 Sales Rep... Which is financially better and why?

My company is giving us the option to either be a 1099 sales rep or W2 sales rep. Usually I would choose to be a 1099 with out question. Here's the catch.. the company is requireing each 1099 rep to buy an Errors and Omissions Insurance policy that will cost anywhere from $5000 to $8000 per year in premiums. Im trying to work out the math, but there are too many unknowns. Is anyone familiar with E&O insurance? Is this normal for orthopedic sales reps? My gross revenue is pretty low... less than 200k per year. Any thoughts?
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  #2  
Old 12-13-2008, 04:58 PM
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Wonka Wonka is offline
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Default Re: 1099 or W2 Sales Rep... Which is financially better and why?

If you go 1099, can you sell for other companies too? Any distributor needs that insurance.

It's too hard to say which will be better without analysis.
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  #3  
Old 12-13-2008, 08:04 PM
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thehairyfiddler thehairyfiddler is offline
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Default Re: 1099 or W2 Sales Rep... Which is financially better and why?

Quote:
Originally Posted by jtgator View Post
My company is giving us the option to either be a 1099 sales rep or W2 sales rep. Usually I would choose to be a 1099 with out question. Here's the catch.. the company is requireing each 1099 rep to buy an Errors and Omissions Insurance policy that will cost anywhere from $5000 to $8000 per year in premiums. Im trying to work out the math, but there are too many unknowns. Is anyone familiar with E&O insurance? Is this normal for orthopedic sales reps? My gross revenue is pretty low... less than 200k per year. Any thoughts?
I had this argument with Hef before. Companies are not legally permitted to "hire" agents on a 1099 unless the "employee" meets several Federal Law criteria. Circumventing payment obligations (and even more importantly, liability issues) via 1099 is not permitted.

If the company pays you a straight commission, they are handcuffed in what they can do from a "management" point as well.
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  #4  
Old 12-14-2008, 12:07 AM
Anonymous
 
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Default Re: 1099 or W2 Sales Rep... Which is financially better and why?

The only ones I know getting paid on a 1099 are selling herbal supplements out of the back of their POV.

1099 sales sucks unless you lie like a bastard on your deductions.

And I don't recommend it.
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  #5  
Old 09-13-2011, 01:42 PM
Anonymous
 
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Default Re: 1099 or W2 Sales Rep... Which is financially better and why?

Quote:
Originally Posted by jtgator View Post
My company is giving us the option to either be a 1099 sales rep or W2 sales rep. Usually I would choose to be a 1099 with out question. Here's the catch.. the company is requireing each 1099 rep to buy an Errors and Omissions Insurance policy that will cost anywhere from $5000 to $8000 per year in premiums. Im trying to work out the math, but there are too many unknowns. Is anyone familiar with E&O insurance? Is this normal for orthopedic sales reps? My gross revenue is pretty low... less than 200k per year. Any thoughts?
Check out the Professional and General Liability Insurance offered through membership in Medical Sales Advocates. It's the lowest cost option we have found. The website is www.MedicalSalesAdvocates.com.
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