Three Reasons Why I Don’t Have My Workers Sign Non-Compete Agreements

Uncategorized Jan 12, 2016


Danny Cuevas(on our Profit Sourcing Social Facebook Group) asked, “Do you have your independent contractors sign a non-compete agreement?”

No, we don’t have our people sign non-compete agreements. A non-compete clause/agreement (NCC) is “a term used in contract law under which one party (usually an employee) agrees not to enter into or start a similar profession or trade in competition against another party (usually the employer)”. One of the big fears that most online sellers have, when it comes to hiring help, is that all of the secrets of their business will be exposed, and could potentially be used against them. What would stop a new worker from starting their own company, following our same business model? Both our Retail-Sourcers and our Book-Sourcers have access to a lot of profitable information, shouldn’t we be worried?

First off, from the information that I’ve gathered, non-compete agreements are very hard to hold up in court. Regardless, I have no desire to get into litigation, especially over book selling. I would rather spend my time and money on building our business then squabbling in court. If one of our Book-Sourcers defected, we may be slightly frustrated but we would get over it pretty quick. So, it really all boils down to a gentleman’s agreement based on mutual trust. We ask all of our people to refrain from selling on Amazon while they are working for us. We also ask that our Book-Sourcers refrain from using our scanning devices to buy their own inventory. But, I’m really not worried and this is why;

1) Our Book-Manager, Book-Sourcers, and Book-Listers are compensated well, which means that they’re happy. We also go out of our way to ensure that they are recognized for their hard work in other ways. We try hard to ensure that they have no reason to leave but every reason to stay. Also, if we have treated our workers well, and they are decent people, they wouldn’t want to hurt our business by going into competition with us. We should try hard to earn the trust and admiration of those whom we employ, if we are successful I’m confident we don’t have to worry about being “stabbed in the back”.

2)It would take a significant investment for these people to start their own book-selling or retail arbitrage business, that is, “significant” for most people these days. According to a recent article that was published on the Fox Business website, “The typical American isn’t saving anything, according to a new survey.” The article goes on to say that the average American has $668 left over each month after paying their bills, but that most of this money is spent on luxury items or consumable products and not put into savings. This lack of savings really prevents people from taking what they learn about our business and applying it for themselves.
*If you’re interested in what the start-up cost are for a online book-selling business is, check out these articles:
Estimated Start-Up Costs for a Book-selling Business on Amazon
How Much Up-Front Money Does it Take to Earn Passive Income Selling Books on Amazon?

3)Finally, most people are not entrepreneurial in heart & mind. They aren’t looking, and therefore seeing, the business opportunities that we do. I think back to the number of jobs that I have held over the years and I never did any calculations as to how much money my employer was making off me. At the time the whole idea of running a business seemed so confusing and complex. I was much more focused on the task at hand , and on what I was looking forward to doing as soon as I got off work. People like a regular, dependable source of income, so the majority of people will have no desire to steal you business.

All-in-all, I care about the people who work for me, and I want them to succeed in big ways. So, the idea of them going into competition with my business is sort of bitter-sweet. On the one hand I would be slightly annoyed that I had a new direct competitor, but at the same time this person, who I care about, is starting their own business. This is a good thing! I would be happy that they decided to take the big leap into business ownership, from “Employee” to the “Self-Employed”.

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