Should You Hire A Sales Rep?

Should You Hire A Sales Rep?

Operations | Posted by YouInc.com - April 25, 2016 at 12:00 am
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“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.

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.

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.

What business issue keeps you up at night? Let us know. We’re here to help.

Tags: online, logistics, amy & danielle, daily, fitness, rules, growth, manifesto, procrastination, strategies, brand, fix my biz, money, sales

Fix My Biz
Amy Ballon and Danielle Botterell frequently speak on the topic of entrepreneurship to the media, at seminars and conferences. Both women received MBAs from the Rotman School of Management at the University of Toronto. They founded Admiral Road Designs, which they sold in 2013 after more than 11 years. These days, the best friends continue to work together, advising other entrepreneurs via their business, Spark Consulting
Click here to read more articles from Fix My Biz.
Comments
Thigh Society
August 9, 2013 at 4:36 pm

Thanks Amy & Danielle!

Mark Burdon
August 9, 2013 at 5:29 pm

Thanks for the mention Amy and Danielle! Sorry to jump in on your conversation however having been in sales for many years I couldn't resist jumping in. I promise not to step on your toes in future posts. :) Have a great weekend!

Fix My Biz
August 10, 2013 at 5:47 pm

No apology required! We appreciate your input. You Inc. is about building our entrepreneurial community - that's why we're all here!

Camille Boivin
August 14, 2013 at 5:52 pm

Very interesting points to consider. Thanks for raising the idea of sales reps, Amy and Danielle!

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