How to price your services without underselling — and the three things you need to set up before you take your first client call as an independent contractor.
A clear framework for setting and defending your commission rate or retainer fee, the income math to work backwards from your goals, and the essential business setup steps every new independent contractor should complete before their first client call.
The number one mistake I see with new 1099 contractors is taking whatever rate they're offered and hoping it's fair. The second is charging too little because they don't believe yet that they're worth more. Both are avoidable once you understand what the math actually looks like. Know your number before the conversation starts — not during it.
— Katherine Rodriguez, National Sales ManagerAs a 1099 sales professional, you'll generally be compensated in one of three ways. Understanding which model you're working with changes how you evaluate and negotiate any offer.
Before you accept or negotiate any rate, do the math in reverse. Start with what you need to earn and work backwards to understand how many calls, how many closes, and what commission rate makes that realistic.
Goal: $3,000/month
Needed: 10 closes per month at this rate
If calls are 20% close rate: 50 qualified calls per month needed
Reality check: Is 50 qualified calls per month realistic for this offer?
At a $3,000 offer with 10% commission, you need 10 closes/month to hit $3,000. That's doable on 40–50 warm calls with a solid close rate. At a $10,000 offer with 10% commission, 10 closes brings you $10,000 — but $10K offers have longer decision cycles. Run the math for every offer before you commit.
Most commission rates for 1099 closers are negotiable, especially if you're coming in with demonstrated skill or a track record. Here's how to approach the conversation:
Calculate what rate you need to make the opportunity worth your time given the offer price and expected call volume. This is your floor — the minimum you'll accept. Don't start the conversation without knowing this number.
When an offer rate is presented, your first move is a question: "How did you arrive at that percentage?" or "What are your current closers earning on average per month at this rate?" This gives you information without revealing your position yet.
Instead of "I need 15%," say: "Based on the call volume and the offer price, at 10% I'd need to close X deals per month to hit a sustainable income. At 12–15%, the math works for both of us to invest fully in this. Is that conversation possible?" You're anchoring to the business logic of the arrangement, not just your personal preference.
If the math doesn't work at any rate they're willing to offer, it's not the right opportunity. A 6% commission on a $500 offer with 15 expected warm calls per week is not a business — it's busywork. Your time has real value. Walk toward opportunities where the math clearly works.
You don't need a formal business structure to start as a 1099 contractor — you can begin as a sole proprietor under your own name. But there are three practical things to handle before you start working with clients:
You do not need to form an LLC, hire a lawyer, or build a website before you take your first 1099 client. People overcomplicate this. A separate bank account, a clear agreement in writing, and a tax set-aside account is all you need to start cleanly and professionally. Build the infrastructure as the business grows.
— Katherine Rodriguez