Reverse MarginSM is the term used to describe compensation plans that pay a 50% (or more) commission to company Representatives. Relative to other plans that pay 2-30% commissions, many Independent Representatives prefer the higher percentage for obvious reasons.
This type of compensation plan is not appropriate for all products and/or services, but can be an excellent way for a Company to attract upper-tier Sales Representatives. It is also an appropriate plan for Companies that are focused on and primarily reliant upon Representatives for sales, and who want to apportion a significant percentage of revenues for their valued Reps.
Most Companies that implement the Reverse MarginSM compensation plan displace typical expenses in order to afford the RM. Most are “trim” operations in terms of infrastructure costs, internal employees salaries, and certainly any frivolous expenses.
The federal service mark for Reverse MarginSM is owned by entrepreneur and marketing mentor, Tim Darnell.