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Contract Details Make or Break ISO Agents

If you’re an agent in negotiations with an independent sales organization, the minute details of your contract is critical as that’s where the money is. If your understanding of the contract is minimal than you can expect your contract to provide you with minimal compensation. Sometimes it’s flat out batter to just hire a lawyer to help you navigate the jargon and complexity of your contract as it can save you money down the road.

The Importance of Residuals

One of the common aspects of a contract new ISO agents often overlook is residuals. Should you choose to leave the ISO or if you fail to make a set number of sales each month it could cost you residuals. The details and wording over residuals is a key area of interest in your contract with the ISO.

Illusions in Revenue Percentages

Revenue percentages can be a double-edged sword for agents. If an ISO is offering you a 100% split it’s important to understand what they’re offering a split of. An ISO can mark up costs and fees to lower the split yields. A 100% split of of a statement fee of $50 is less favorable to an ISO agent than an 80/20 split over a statement fee of $2. Crunching the math to figure out what percentages favor you will put you in a better position through your contract negotiations.

Build a Vesting Schedule

When residuals terminate at the end of a contract with an ISO, an agent can acquire residuals that have been accumulating value over time. A contract that offers 20% over two years with the same company and 40% over four years can build up residuals to offer a nice package when they leave the ISO.

Get Multiple Offers

The sheer volume of variables in a contract negotiation is staggering. As an independent agent, it’s important to field multiple offers. Many parts of your contract will be negotiable, so building a spreadsheet with multiple offers and varying factors can help you choose the best contract for you, the ISO agent. ISOs have been offering more generous terms over the last year than they have been over the last decade. The gap between the ISOs revenues and the ISO agent’s residuals is shrinking, and there’s no better time to field multiple offers than now.