How it works
It’s most common on insurance and storm work. Because the rep is paid on profit, every dollar of material, labor or discount comes partly out of their pocket, and every approved supplement adds to it. That ties the rep to margin in a way a flat percent of contract doesn’t. According to Adam Bensman, quoted by Hook Agency, the split averages 10-20% of the job for the rep on insurance jobs.
The trade-offs: reps have to trust your job costing, and payouts swing from job to job. A separate Hook Agency article says the split works for storm work and not for retail.
Why it matters when you hire
Reps who’ve worked a 10/50/50 plan talk in profit, not just sales, which is a good sign. Ask what their average split check was, and match it against commission statements. Most will be storm reps. If you sell mostly retail, ask how they handle price objections, because that’s where storm reps new to retail tend to struggle.
If you’re hiring onto a different plan, run the same job through both and show the rep the numbers. It’s the fastest way to answer “will I earn less here?”