MONTH 3 · SALES PLANNING & STRUCTURE

Compensation Plan & Rep Decision Framework

If I hired someone tomorrow, could I hand them a territory, a comp plan, and a clear definition of what success looks like in 90 days?

Build the fully-loaded compensation plan for each path, then see it flow straight into the cost model — salary, benefits, and field expenses all carry through in real time. Direct (W2) reps cost more up front and take time to ramp — usually about 6 months to meaningful traction and closer to 12 months before they've generated enough revenue to cover the cost of hiring them. Independent reps carry no salary or benefits load, but it typically takes 3–5 of them to generate what one direct rep produces. Enter your real numbers below and let the model show you the actual trade-off, not the conventional wisdom about it.

STEP 1
Product mix

Up to 5 products. For each, set the price and how many units a rep typically sells per closed account.

Product name Price / unit Units sold / account
STEP 2
Rep productivity ramp

Applies to one direct rep's account-closing pace. Most reps need real time in the field before they hit stride.

The early period — building pipeline, first wins.
Once the rep has real traction in the territory.
STEP 3
Compensation plan builder

Salary is only part of what a direct hire costs — benefits load and field expenses are real, recurring cost too. This feeds directly into the cost model below; nothing here needs re-entering.

Direct (W2) rep

$
National average: BLS reports private-industry benefits at ~30% of total compensation (Dec 2025) — roughly 43% on top of wages alone. Defaulted conservatively at 30%; adjust to your actual plan costs.
$
Benefits cost / year$0
Field expenses / year$0
Fully-loaded annual cost (excl. commission) $0

Independent rep

No employer-sponsored benefits for independent reps — this is real economic upside for this path, not an oversight.
$
Most 1099 arrangements have the rep cover their own expenses — defaulted to $0.
Benefits cost / year$0
Field expenses / year$0
Fully-loaded annual fixed cost (excl. commission, per rep) $0
STEP 4
Cost inputs

Training and demo costs are separate one-time onboarding spend, on top of the fully-loaded compensation from Step 3.

Direct (W2) rep

$0
$
$
Typical W2 medtech rep range is roughly 5–12%.

Independent rep

$0
$
$
Independent / 1099 reps typically run around 30%, since there's no base salary underneath it.
Independent reps split attention across multiple lines — this is the real cost of that divided focus.

Commission is modeled as a flat percentage of the revenue each path actually closes, on top of salary (direct) or training/demo cost (independent). Check both rates against your real product margin — a 30% independent commission on a low-margin product can erase the "no salary" advantage entirely.

RESULT
Year 1, per rep (or rep group)

One direct rep

Year 1 revenue$0
Commission paid$0
Year 1 cost (salary + training + demo + commission)$0
Net Year 1$0
Breakeven month—

4.0 independent reps (same output)

Year 1 revenue (combined)$0
Commission paid (combined)$0
Year 1 cost (training + demo + commission, combined)$0
Net Year 1$0
Breakeven monthNot modeled — no salary to recover

Direct rep: cumulative revenue vs. cost

Where the lines cross is your breakeven month.
Cumulative revenue Cumulative cost Breakeven
STEP 5
Scale to your hiring plan

Pull the number of direct-rep-equivalent territories you're planning to fill — 10, if you're using this alongside the Territory Design Model.

Cost to reach the same revenue, at scale

Same target revenue, two different paths to it.

Direct (W2) path
Headcount—
Total Year 1 cost—
Total Year 1 revenue—
Cost per $1 of revenue—
Independent path
Headcount—
Total Year 1 cost—
Total Year 1 revenue—
Cost per $1 of revenue—
STEP 6
Think it through
Cash position: could you actually carry the direct-rep path's cost through breakeven, at the headcount above — without a funding event in between?
Management burden: that many independent reps split across other lines is a different management job than a smaller direct team. Who's actually managing that many relationships well?
What would have to be true about your product or price for the independent path to actually win this comparison?