Outside Vs. Inside Sales Reps: How Compensation Packages Differ

The primary objectives of an outside vs. inside sales rep differ: the outside rep is responsible for developing customer relationships and sales whereas the inside rep handles account maintenance. Consequently, their compensation packages vary significantly. Here are some industry averages and general guidelines based on my experiences consulting with laboratories for the past 10 years.

Salary: For an outside salesperson, the average annual compensation package--including salary and commission--is $48,000 to $52,000; out-of-pocket expenses are additional. Typically, an outside rep is guaranteed 40% of his annual income in fixed salary; the remaining 60% is earned through commission. You might consider a scale-down model salary for the first 12 months of employment, meaning you offer a higher salary at the beginning and decrease it later when the rep begins earning sufficient commission.

To minimize paperwork for both the lab owner and the rep, I suggest allocating a specific...