If you’re among those who want more independence and a career you’re truly passionate about, while also improving your income, the VDI status might interest you.
The term VDI stands for “independent home seller.” VDIs are categorized as self-employed workers. However, you’re not starting out completely on your own, since you’ll be working on behalf of a company.
How does the VDI contract work?
As a VDI, your main mission will be to promote and sell a brand’s products directly to consumers. You can sell all kinds of goods and services: makeup, kitchen equipment, fashion…
There are many sales methods, but the two most commonly used are:
- sales via social networks or websites;
- private sales in group sessions. Private sales can take place at the VDI’s home, but also at hosts’ homes who welcome the session in exchange for benefits.
Finally, you will be paid based on the sales you achieve and the contract you choose.
> Also read: FAQ ABOUT THE VDI PROFESSION
The types of VDI contracts
There are different types of VDI contracts. Brands may offer all of them, or only some.
The buyer-reseller VDI contract
You buy the company's products and resell them by setting your own prices within a given range. The income you receive will be the difference between the purchase price of the goods and the price at which you resold them.
The buyer-reseller VDI contract generally allows the professional to benefit from significant discounts when purchasing various products. This is interesting since the buyer-reseller must always have stock available.
Another key point to remember: this VDI status requires the creation of working capital. This should be taken into account when choosing this type of contract.
Finally, regarding social protection, buyer-reseller VDIs depend on the SSI (Social Security for the self-employed). Thus, their healthcare costs, sick leave, and retirement are covered.
The VDI agent contract
You do not buy the products and you do not manage any stock, but you place your clients' orders on behalf of the company. You will be paid by sales commissions set by the company.
The contract is generally chosen based on the type of products you are going to sell. If you want to sell cosmetics, the buyer-seller contract can be interesting. When you need to buy larger stocks, as is the case with ready-to-wear, the VDI agent contract is more suitable.
A notable advantage to know: VDI agents are considered employees in that they enjoy social protection. However, this does not extend to unemployment insurance or compensation following a work accident. Only the following are covered:
- healthcare costs;
- sick leave;
- maternity;
- retirement.
> Also read: What is the VDI agent status?
The VDI broker contract
This status, similar to that of an agent, is very rarely used. Here are its main features:
- Brokers have a mandate. They sign a contract with the chosen brand;
- Their income comes from two types of commissions calculated based on turnover. These are brokerage commissions and mandate commissions.
Social protection is the same as for VDIs with a buyer-reseller status.
What is the difference with a VRP?
Unlike the VDI, the VRP (travelling sales representative) is a salaried commercial representative (on a fixed-term or permanent contract) who benefits from all associated social protections. Their pay generally consists of a fixed salary and commissions.
Good to know
Whatever the status chosen or offered by the brand, it is essential that the collaboration is formalized by written documents. These must be signed by each party involved.
It is strongly advised not to start your activity until everything is in order. The question of commission is especially important for VDI agent contracts and VDI broker contracts.
The impact of a VDI contract on taxes
Depending on the status, the income declaration procedures are not the same.
- Buyer-reseller
The VDI buyer-reseller must be registered with the RCS or the RSAC. They declare their income as industrial and commercial profits (BIC).
- Agent
Agents declare their income under the BNC (non-commercial profits) category.
This type of status does not require registration with the RCS (Trade and Companies Register) or the RSAC (Special Register of Commercial Agents) if income does not exceed a gross income greater than 50% of the annual Social Security ceiling per year for three consecutive years. This amounted to €20,568 in 2022.
- Broker
The income of VDI brokers falls under the category of non-commercial profits.
The declaration requirements for the RCS and RSAC are the same as for buyer-resellers.
> Also read: How to declare your VDI income?
Good to know
The work of a VDI involves many business trips. As such, VDIs can benefit from a tax deduction of around 10%.
Another important point: social security contributions are paid directly by the direct sales company to Urssaf. These contributions are due as soon as income exceeds 567 euros gross per quarter. The amount varies according to predefined thresholds.
How does compensation work for a VDI contract?
When it comes to compensation, there are a few key points to remember if you want to sign a VDI contract.
- Turnover calculation
It is most often calculated on the turnover excluding tax.
- The VDI contract does not create a subordinate relationship with the brand
The VDI is free to organize their activity as they wish. Unlike a sales representative (VRP), who is an employee of the company, they are not subject to specific sales targets.
However, it is not uncommon for brands to offer challenges with rewards or gifts to encourage VDIs to optimize their performance. This is especially true for agent VDIs.
- Compatibility with income from a permanent contract
A VDI contract is compatible with a permanent contract (CDI). The income from both activities can be combined completely legally. The VDI activity is generally carried out part-time, in the evening, on weekends, or during holidays.
> Also read: What is the duration of a part-time job?
- The amount of compensation for agents
The commission rate is generally between 20% and 35% depending on the brand. It is possible to set thresholds based on sales achieved. Reaching these thresholds means an increase in compensation.
The margins of buyer-resellers
Buyer-resellers must report their margin amounts each quarter so the company can calculate and pay social security contributions to Urssaf.
To maximize their profits, it is not uncommon for buyer-sellers to choose the maximum recommended price for each of these products.
To learn more about VDI contracts and their specificities:
- Articles L.135-1 to L.135-3 of the Commercial Code;
- Articles 1984 to 1990 of the Civil Code;
- the Direct Selling Federation (FVD);
- Article 1457 of the General Tax Code;
- Order of May 31, 2001 regarding the flat-rate contributions of direct sellers.
Do you love fashion and are you interested in a VDI status at Elora? Contact our teams to get information before embarking on a new professional adventure!
You will be supported at every step and benefit from training.
Learn more about the role of Fashion Consultant at Elora (fashion advisor).
