Distributors Stay Strong Despite a Weak Economy

Because it is a totally new concept, getting the ESOP message across is an educational process that's still unfolding, and the full impact of the ESOP on employees' careers and earnings won't be realized immediately.

Said Zavadil, "It's going to take approximately three to five years for people to really understand what the ESOP means to them. They're not used to getting something for nothing, especially something that has value, but they can see on their annual statements that their shares have gone up."

While sales associates have the flexibility to remain independent contractors, Zavadil hopes that those participating will consider their ESOP a cornerstone of their career at American. "It's having a piece of the rock without giving up any of the split or buying stock," he said.

Zavadil explained that on custom items, the salesperson receives 75 percent of the commission and the remaining 25 percent goes to the company. On stock items, it's a 50/50 split and promotional items result in a 65/35 split. The average combined product split, company-wide, is approximately 70/30.

However, there are situations requiring uniquely bundled solutions that may involve equipment or packaged deals, and blended splits are then developed to account for the variations. "Flexibility is important, especially in an environment like ours," said Zavadil.

American sales associates have been approached by other companies offering a 75/25 or even a 80/20 split, but as Zavadil pointed out, "The industry is not about splits the way it once was. Talented sales associates want to partner with companies that evolve with the customers and the market in order to create lucrative selling environments and provide e-commerce solutions." He added that most companies never get beyond a certain point in the evolution process, but American continues to embrace the changes.

For American, this has meant growing vendor relationships at a time when other companies are scaling back on vendors and product lines. "We have more than 6,000 vendors," said Zavadil. "It's important to treat your vendors as you would your customers."