Take a stroll through any hospital and look at the incredible number and variations of devices you see. During your next doctor's office visit, try to count how many medical devices you pass on your walk from the waiting room to the examination room.
When you're done counting, realize that every device that you saw, counted, wondered if it is going to be used on you and then questioned about its purpose, came to its location as the result of a sale taking place. And unless people stop getting sick, old or injured, those sales will continue well into the future.
1099 or W2
The number of medical device manufacturers is enormous. Some manufacture just one specific device and some manufacture hundreds of devices. There are those who design, build and sell multimillion-dollar pieces of equipment, and others make medical-grade cotton swabs. The variations are seemingly endless as are the ways their sales professionals earn their income. In general, sales reps who sell medical devices are either independent sales professionals or full-time, W2-receiving employees. For those interested in starting a career in medical device sales, expect to find a fairly even split between those positions that are 1099 based and those that require that you are a company employee.
Unless you are only comfortable working with a commission plan that includes a combination of salary and commissions, your main focus should be on finding a company that pays a high percentage of commissions, based on either gross profit or number of devices sold.
Manufacturer's or Distributors
When looking for a sales career in the medical device industry, your search will be focused on either working directly for the manufacturer or a distributor. Both have advantages and benefits, and both have potential drawbacks.
Working for a Manufacturer
The main benefit of working directly for a medical device manufacturer is pricing. Since the company makes whatever device you are selling, they have the greatest flexibility in pricing. Another advantage is direct name branding. Let's say that you have a job selling MRI machines that are made by XYZ corporation and you are involved in a competitive sales cycle at a large hospital. Your competitor is also selling the same MRI machine, manufactured by your company, but they work for a distributor. Not only will you be able to get more aggressive with pricing support levels, but since you represent the manufacturing company, the decision makers at the hospital will, most likely, feel more comfortable buying from you than from your competitor.
There are several disadvantages to consider as well. The main being your limited portfolio of products. Distributors usually have more than one line that they represent, allowing them to match their proposed product to a customer's needs better.
Working for a Distributor
Distributors have arrangements, usually with several manufacturers, to sell their products. Depending on their commitment levels, they receive pricing support levels which allow them to sell the device for a profit. Typical support levels range from 10% to 40% discounted pricing. What this means is that a registered distributor can buy a device from a manufacturer for 10, 20, 30 or 40% less than the published MSRP (Manufacturer's Suggested Retail Price.)
Most distributors expect to earn their profit not on the sales of devices but on value-added services. Installation or inventory management are two common value-adds that bring profit to distributors. As a sales rep working for a distributor, you should make sure that you can earn commission on both the sale of the device as well as on any additional services sold. If not, you'll need to determine if the market to which you will be selling will support margin levels that are high enough for you to earn the income that you desire.
You will also need to determine how many competitors, including the possibility of competing against manufacturer reps, that you will be competing against.
Lastly, it is important to understand how many different manufacturers you will be representing and how many different devices you will be able to sell. More is not necessarily better, but more is better than not enough! No matter how many you sell, you need to be the subject matter expert on the device or devices you sell. If you sell a product you're not very familiar with, you probably won't sell many devices!