January 31, 2014 8:05 PM   Subscribe

I am thinking of going to vendor/contractor from full time.

I am currently a full time w2 employee. However I am thinking of eventually changing it to a vendor or contractor position and had some questions around it-

First off can a vendor be an employee for a company? How do you describe a vendor? It is only a business? Can it be a staffing agency?
What are the advantages/disadvantages of going from w2 to this?
How much increase in pay (per hour) should I ask for? Lets say I get paid, if I do all the math, $30 an hour. As a vendor or contractor how much should I ask for?
Any resources that you all can point me to which has details around this?
For large corporations which department do you start with that manages vendor relationships?

Thank you all!!
posted by Greenlight2b to Work & Money (4 answers total)
Why do you want to switch? What problems do you currently have that you think it will solve?

First off can a vendor be an employee for a company?

It depends on the company but many have rules against it, especially larger ones.

What are the advantages/disadvantages of going from w2 to this?

Upsides: In general, contractors charge by the hour, so if you're getting socked with a lot of unpaid overtime as an employee, you either financially benefit or they stop working you as much. Some companies do budgets in ways that they can't spend money on employee salaries but can spent money on contractors. You can more easily work for more than one company. Certain expenses become deductible.

Downsides: You can be dismissed easier with no unemployment. You may or may not be first on the chopping block if the company hits bad times. You have to do your own health insurance. There's more taxes and paperwork that you have to handle yourself. You may become more likely to get audited by the IRS. You might get sued. You have to keep up appearances - I sometimes process work problems by thinking about them while fiddling with solitaire. That's easier to do as an employee than an expensive contractor.

How much increase in pay (per hour) should I ask for?

In technology, the general rule is twice a normal hourly rate. I don't know about other industries.
posted by Candleman at 10:37 PM on January 31, 2014

My understanding is that a contractor is a person, and a vendor is another company. If you do this you will be a contractor.

Say Company A hires you to be a $something for a fixed term. You are a contractor.

Say Company A hires Company B to do a project with fixed deliverables and objections. Company B is a vendor. (Employees of Company B are therefore considered vendors too, or vendor representatives. They might or might not be full time employees of Company B.)
posted by Xany at 4:35 AM on February 1, 2014

Response by poster: I see. Thank you.

I was hoping to be a vendor company. Any leads on books/articles or other advice will be greatly appreciated.
posted by Greenlight2b at 4:16 PM on February 1, 2014

If you don't provide some more details about what you do and what you hope to accomplish, it's hard to give you any advice.

If you want to be a vendor, that implies you want to sell something, and if you're a company of one person, that implies a product that can be made by a single person. At that point, is the company you hope to sell to better off just hiring someone else internally to provide the product? And can the quality of product you provide (as a company of one) beat the quality that someone who works for the company and can leverage other internal resources (Q/A, documentation team, etc.) can provide?

To be blunt, your written communication is not good and that will be a detriment if you want to act as a vendor or contractor to many companies.
posted by Candleman at 12:09 AM on February 2, 2014

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