“I've been approached by some sales agencies who want to represent my brand, Thigh Society, across Canada. Assuming they're reputable, what factors would you consider when deciding to work with (or not) a sales rep?”
- Marnie, Owner, Thigh Society
Thigh Society manufactures Canadian-made undershorts intended to prevent “chub rub.” The company launched in 2009 and has garnered media attention. Now the sales reps are knocking on Marnie’s door, and she needs to decide if this is a growth strategy she wants to pursue.
Pros
The greatest benefit to using a sales agency is the idea that the rep can geographically reach people that you can’t. You’ve likely seen traction with your product by promoting it to the people around you. By using a rep, you have the opportunity to leverage their network. Reps are often experienced, skilled sales people, and may be able to do a better job closing a sale than you can. Also, good reps know all the key buyers, and they can offer you insights into what key customers want, saving you the heartache of manufacturing an off-trend product. Another advantage of using a sales rep is that it frees up some of your capacity. Instead of focusing on selling, you can focus on the business of running your business.
Related: Business Success With Scotiabank: 4 Ways You Can Save Both Time And Money
Cons
By using a sales rep, you are forfeiting margin on your product. The rep will likely take a commission on sales (typically between 10% and 20%), so you need to ask yourself if you can afford to give up a percentage of your sales price. There can also be hidden costs like rental space in trade show booths, showroom fees, and ads in their catalogues. Run the numbers – it may be more economical to undertake certain sales initiatives in-house. Also, it can be difficult to find consistent representation geographically, and reps will typically insist on exclusivity in a region.
What You Can Do
You can do your homework. Tech entrepreneur and YouInc member Mark Burdon suggests, “You should see if the agencies have sold products like yours before. You may want to ask them who their clients are and what their volume expectations would be for delivery.” Talk to some of the rep’s current clients to get the low down.
Related: The Confidence Code For Entrepreneurs
You likely won’t be able to outsource sales completely. Remember: No one is going to care about selling your product as much as you do.
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