What is the VDI contract?

How does the VDI contract work ?

As a VDI, your main task will be to promote and sell a brand's products directly to consumers. You can sell all kinds of goods and services: make-up, kitchen equipment, fashion, etc

There are many different sales methods, but the two most commonly used are :

• Sales via social networks or websites;
• Private sales meetings. Private sales can take place at the VDI's home, or at the home of hosts who will host the meeting in exchange for benefits.

Finally, you will be paid according to the sales you generate and the contract you choose.

> Read also : FAQ ABOUT THE MAIL ORDER PROFESSION

Types of VDI contracts

There are different types of VDI contract. Brands can offer all of them, or only some of them.

The VDI buyer-reseller contract

You buy the company's products and sell them, setting your own prices within a given range. The remuneration you receive will be the difference between the purchase price of the goods and the price at which you resell them.

The VDI buyer-reseller contract generally allows the professional to benefit from significant discounts on the purchase of various products. This is particularly advantageous if the buyer-reseller is required to keep a permanent stock.

Another key point to remember is that VDI status requires you to build up working capital. This needs to be taken into account when choosing this type of contract.

Finally, as far as social protection is concerned, VDI buyer-resellers are covered by the SSI (Social Security for the Self-Employed). This means that their healthcare costs, sick leave and pensions are covered.

The VDI agent contract

You will not buy the products or manage stocks, but you will place your customers' orders on behalf of the company. You will be remunerated by sales commissions set by the company.

The contract you choose generally depends on the type of products you are going to sell. If you want to sell cosmetics, a buyer-seller contract may be a good option. When you need to buy larger stocks, as is the case with ready-to-wear, the VDI agent contract is more suitable.

A key advantage to be aware of is that VDI agents are treated in the same way as employees, in that they are covered by social security. However, this does not extend to unemployment insurance or compensation following a professional accident. Only the following are covered:

• Healthcare costs ;
• Sick leave ;
• Maternity ;
• Retirement.

> Read also : What is VDI agent status ?

The VDI broker contract

This status, similar to that of mandatary, is rarely used. Its main features are as follows:

• Brokers have a mandate. They sign a contract with the chosen brand ;
• They derive their income from two types of commission, calculated on the basis of sales. These are brokerage commissions and agency commissions.

Social protection is the same as for VDIs with buyer-seller status.

What's the difference with a sales representative ?

Unlike VDIs, VRPs (voyageur représentant placier) are salaried sales representatives (on fixed-term or permanent contracts) who enjoy all the associated social protection benefits. Their remuneration generally consists of a fixed salary and commission.

Good to know

Whatever the status chosen or proposed by the brand, it is essential that the collaboration is formalised in written documents. These must be signed by each of the parties involved.

You are strongly advised not to start your business until everything is in order. The question of commission is particularly important for VDI agent contracts and VDI broker contracts.

The impact of a VDI contract on taxation

Depending on your status, you will have to file different tax returns.

• Buyer-reseller

VDI buyer-resellers must be registered with the RCS or RSAC. They declare their income as industrial and commercial profits (BIC).

• Agent

Agents declare their income in the BNC (non-commercial profits) category.

This type of status does not require registration with the RCS (Registre du commerce et des sociétés) or the RSAC (Registre spécial des agents commerciaux) if gross income does not exceed 50% of the annual Social Security ceiling for three years in a row. This represented €20,568 in 2022.

• Broker

The income of VDI brokers falls into the category of non-commercial profits.

The conditions for registering with the RCS and RSAC are the same as for purchaser-resellers.

> Read also : How do I declare my VDI income ?

Good to know

Working as a VDI involves a lot of business travel. As such, VDIs can benefit from a tax deduction of around 10%.

Another thing you need to know is that social security contributions are paid directly by the direct sales company to Urssaf. These contributions are due as soon as income exceeds €567 gross per quarter. The amount varies according to predefined levels.

How does the remuneration for a VDI contract work ?

When it comes to remuneration, there are a few key points to bear in mind when signing a VDI contract.

• Calculating turnover

It is usually based on pre-tax sales.

• The VDI contract does not create a subordinate relationship with the brand

VDIs are free to organise their business as they wish. Unlike a sales representative, 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 optimise their performance. This is particularly the case for agents.

• Compatibility with income from a permanent contract

A VDI contract is compatible with a permanent contract. Income from the two activities can be combined in a completely legal manner. VDIs are generally carried out on a part-time basis, in the evenings, at weekends or during the holidays.

> Read also : Qow long is part-time ?

• The amount of remuneration paid to agents

The commission rate is generally between 20% and 35%, depending on the brand. Levels can be set according to the sales achieved. If these are exceeded, the remuneration increases.

Buyer-reseller margins

Buyer-resellers must provide the amount of their margins every quarter so that the company can calculate them, as well as making social security payments to Urssaf.

To maximise their profits, it is not uncommon for buyers and sellers to opt for the maximum recommended price for each of these products.

To find out more about VDI contracts and their specific features :

• Articles L.135-1 to L.135-3 of the French Commercial Code ;
• Articles 1984 to 1990 of the Civil Code ;
• Fédération de la vente directe (FVD) ;
• Article 1457 of the general tax code ;
• Decree of 31 May 2001 on flat-rate contributions for door-to-door salespeople.

Do you love fashion and are you interested in a career in the fashion industry? vDI status at Elora ?Contact our teams for more information before embarking on a new professional adventure !

We'll support you every step of the way and provide training.