When I hired my first sales rep in New York it was the best thing I ever did for the growth of my company. The first season sales doubled for the year. It was just the beginning. I had really good success selling my line myself. I personally sold to Nordstrom. I needed growth and I wanted it now. Off I went to NY and the rest was history.
If you want your business to grow you’ll need to find other people to sell your products other than yourself. Hiring a sales rep is one of the best and fastest ways to increase your sales. You’ll find it’s more economical for you to find independent sales representatives to sell for you because you will need more time for other parts of your business and you don’t want to spread yourself too thin. After all you have other things to do in creating your empire!
One thing to remember is no one is ever as enthusiastic or knows your products as well as you do. It is therefore up to you to create the enthusiasm in your sales rep and educate him/her about your product making sure they have all the proper line sheets, catalogs, brochures and order form information.
A sales rep is your business partner. You both win when there are sales. If you partner with a seasoned rep, the rep has numerous industry relationships and contacts: buyers, other sales reps in different locations, other manufacturers, media and other industry experts. They also know their industry – what works, what doesn’t. A newer hungry rep will have to make those contacts fast or go out of business.
Remember that no matter what the rep tells you, the truth is his or her loyalty is to the retail store and not to your company. It sounds strange that when you are the one signing their commission checks that they would not be loyal to you, but it simply does not work that way. The reason is, the sales rep must keep his credibility with the retail store, they may purchase several lines out of the showroom and it is up to the rep to keep that customer happy. The last thing a rep wants to do is lose his customer by having him purchase goods that will not sell or buy the wrong quantities.
When you are ready to find a sales rep, don’t be disappointed if they don’t fall all over you to get your line. Taking on a new line is called “pioneering” a line and not all reps want to do this. It takes lots of their time and energy to introduce a new company into the marketplace.
Buyers are often skeptical of new lines because they have no track records for delivery, quality or sell through. Though reps are always looking for something new they are often skeptical of someone new to the industry because – let’s face it – they get paid when the goods are shipped and this is how they make their living.
Having often been asked “ How do I find a good sales rep?” I’ve put together a few pointers first on Where to Find them and then what to ASK them:
WHERE TO FIND A GOOD SALES REP:
1. Ask retail stores in the territory who they like working with and who they think would be a good rep to handle your product. If you already have customers in the territory with whom you do business – ask them first. If you don't do business in the territory find out who you’d like to do business with and then contact them and ask which sales reps they recommend. Many buyers have favorites that they enjoy working with and are happy to put you in touch with each other. Just be sure this is a store where your line is already selling or a store where you’d really like to have your products.
2. Go to a Trade Center and visit Showrooms. Most major cities have trade centers where reps have permanent showrooms. These are showrooms where buyers purchase wholesale goods from all types of retail establishments. There is not necessarily access by the general public to these showrooms so you will likely need to establish the purpose of your trip with a guard or some other official. Take proof that you are a legitimate business (business license, printed check forms, business cards etc. will usually do) because you may need to show proof that you have a business in order to get access. Once you are in the Trade Center go through various show rooms to see which reps carry what lines for sale. After careful observation you will be able to see which showrooms and which reps might best be able to represent your line. Don’t look for lines that are exactly like yours – look for showrooms where you line would be complimentary. Be observant of how the sales people work in the showroom and if it’s a small one you can even talk to the rep. Be careful to respect the sales rep’s time with paying customers.
3. Ask for referrals from other manufacturers: Your friends in the industry with compatible products might be able to refer you to a rep they know.
4. Ask other sales reps: If you have found a showroom you like or rep you are impressed with and for one reason or another they are unable to take your line, by all means ask them for a referral. Often they will know a rep who is new to the business, looking for new lines and quite hungry to pioneer a new line. A referral from another rep can be a very good source for a new vendor. Remember just because a rep is new does not mean he/she is not good, professional, honest and hard working.
5. Tradeshows are great places to find reps – or for them to find you: Tradeshows are where business gets done and deals are made. Reps are scouting as are manufacturers – be on the lookout for a rep you’d like to work with – this is the best time to see them in action and meet face to face. And if you don’t have a booth at a show – walk a show and scout out the possibilities – gather business cards and figure out who you want for your line.
WHAT TO LOOK FOR IN A SALES REP:
1. Do your due diligence: Call other vendors who are using this sales rep. Ask the following questions;
Has the sales volume has met with their expectations.
Does the rep return phone calls and generally give feedback.
Does the rep follow through with sales calls?
What is the rep’s general reputation?
How long has the rep represented their line?
Is the rep hungry – meaning does he/she want to and need to make a living?
2. Interview the rep in person. Never, Never, Never hire a sales rep without having a face to face meeting and seeing his or her showroom. Believe me the worst thing you can do is give your product to someone you haven’t met. You are entrusting this person to create significant sales volume for you and you are hiring this person to represent you and your company – You must meet!!! When you meet someone you will develop rapport, the rep will see that you are serious about your business and you will be able to see if this is a person with whom you can develop a long term relationship.
3. Check out the Showroom (unless the rep is a “road Rep”) and look for the following:
Is the space well used?
Is the showroom clean?
Are the displays interesting and well merchandised?
Ask how often displays are changed?
Does the rep smoke? Some do.
Once you decide on which rep to hire then it is important to come to an understanding of what exactly you are hiring him/her to do for you and you will need to have a written agreement. Generally it is not necessary to have a formal contract and often a letter from you to the rep and then signed and acknowledged by both of you is sufficient. However I would check with your attorney.
I am leery of the rep who presents you with a huge contract. I am not an attorney so cannot advise you as to the best agreement, however it has been my experience that you both must come to an understanding of 3 elements:
1. Territory where the rep can sell,
2. Commission rate and
3. When the commission will be paid. (typically commission is paid on shipping or within 15 days of shipping, but this can vary depending on your agreement)
4. You may also include what you expect the rep to sell, but until you have had one or two seasons in experience with this rep it is hard to predict.
5. Who pays for the samples
Remember, a sales rep is an extension of your business – and therefore an extension of you. Hire wisely
© 2011 Jane Button International Design2Market Success
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