Depending on industry there are several types of remunerations scheme which can appeal to a different profile of Independent Business Owner (IBO).  We cover these profiles separately.
 

We categorise companies as follows.

Remuneration scheme principles.

Sales people are focused on making sales. This is the main measure of their achievements. This can produce a challenge for working out commissions as profit margins can vary between 10 - 90%.  The lower end margins tend to be for volume and repeat order products. The challenge arises when there is a range of products at different margins. You may have to set the commissions by product.
 

You may prefer payments based  upon margin. This makes calculations easy, but produces problems. When I have seen this done sales agents constantly ask questions, demanding answers, to challenge the margin. They will not just accept your overhead figures. They will challenge everybody and everything that you buy in. Information like salaries you want to keep confidential. You do not want IBOs getting involved with your costs.
 

IBOs need something to strive for, to be promoted, and to enjoy the status of reaching a certain achievement level. We have found in practice that having three levels of IBO works best. There can be more, but never less.

So, for example you may offer on a high margin product

IBO  25% 

Senior IBO  30%  after first 10 deals.

Partner IBO 35% after 25 deals.
 

The Sales role is to find new prospective customers and nurture them towards a closed deal. Then Customer Service and Account Management staff take over the client liaison. However, in many situations it is better for the person who opened and closed the sales to continue to build on that established relationship. This can include cross and upsells. This balance depends on your products, market, and company policy. This will affect the way you structure remuneration. For example, there may be a tapering off of the sales commission over time. For example, commission at half level for year two.
 

An important concept for IBOs, not relevant to employees, is residual income. Obtaining residual semi or fully passive income is a massive motivational incentive. From your point of view locking in star performers through residuals is of significant value.  Although IBO dropout rate initially can be high the longevity of IBOs is far longer than employees, due to this factor.
 

Often, we suggest a Fast Track Bonus. This is to counter the honeymoon period/settling in mentality. Many will sign up and then procrastinate. To stop that offer a special bonus with a deadline. This can be work in progress achieved in month one.

There may also be other special incentives such as a specific target like entering a new market.
 

Usually, it is better to have high prices and offer the IBO the ability to discount under specific rules. This can mean a compromise on their commission rate as well as the absolute amount.
 

As you grow you will need to delegate responsibility to a Term Leader. It is best to recruit IBOs and a natural leader will emerge. These need to be paid an override on the IBOs that they lead and manage. Typically, 10%.
 

You need to manage, train, coach, and mentor your IBOs. This should be done in reaction to how much action they take and success they achieve. For example, a quarterly weekend sales training might be in a 3-star hotel in Wolverhampton for the average performers but in in a 5-star luxury resort in Marbella for the star performers covering higher level topics.  It is again using status as a reward. It will really motivate those in the lower group to get into the higher echelon.
 

Being part of a team is important to IBOs. You must talk to them at least weekly and have regular training sessions both at a group and individual level.
 

Companies like paying on results because it reduces all the losses from employees that never reach breakeven point. Sales agents, IBOs in return for not having a basic salary, office etc take far more risk and in return take a far larger percentage of the sales. Typically, a traditional salaried sales person in an office  1 in 5/10 new sales recruits make it to profit. This means it takes a fortune to build up even a small team with modest returns.  The Remote IBO option makes less profit per each sale, but a guaranteed profit with no loss makers to erode that result. To increase profits, scale.