Why You Should Hire Sales Reps – Or Not

By Carolyn Edlund

 

Many creative entrepreneurs would jump at the chance for a sales representative to take their product line on the road and sell wholesale into retail stores. What an opportunity! Or is it?

 

Having a sales force can be an immense boost to your business growth, which is why big companies hire them.  As an artist, craftsperson or designer, you could have the opportunity to hire sales reps as well. It may work beautifully, or may not work at all. Here are 7 Pros and Cons of hiring reps:

 

  1. Suitability. Reps who have an established book of business may consider carrying your products to enhance what they already offer the accounts in their territory.  This means that if your work won’t “cross-sell” into their store accounts, your sales will fizzle. Take a look at what other manufacturers they are representing. If your product has a niche market, you need to work with reps who call on retailers in that niche with their other lines.
  2. Geography. Reps tend to work in geographic territories. Will your work sell in their region? If your products have a Caribbean flavor, having a rep in Alaska may be futile. Concentrate on parts of the country where your product would have broad appeal, and work with reps with an established presence in those areas.
  3. Practicality. Acting out of desperation, and taking any willing sales rep, won’t help your business. You may also be unrealistic about the number of sales they will make for you. In general, reps make 80% of their sales from 20% of their product lines, which means there are quite a few vendors who get little action. This is why it’s essential to hire a rep who is a good match.
  4. Preparation. You will have to provide product samples and sales materials for your reps, as well as have ongoing contact with them and support so that they can promote and sell your line effectively. This involves time and money. Are you ready for the commitment?
  5. Strategy. Many reps work in groups, with a manager in charge, and sales representatives in a number of territories. If you strike a deal with a group manager, you may be required to use all the reps in the group. In that case, you might have to let go of existing reps you have in conflicting territories. On the other hand, many groups don’t require that their reps are “exclusive”, so they can represent non-competing outside lines, which means you are contracting with an individual. Gain an understanding of the situation before you sign an agreement with a rep or a group.
  6. Finances. Reps in the gift and home decor market typically make 20% commission, and you must pay them on time to ensure that they will continue to promote your line. Remember, reps are “straight commission” and have many expenses of their own. If you can’t afford the commission, you either need to reconsider your pricing, be able to reduce your other expenses, or pursue other ways of selling your line.
  7. Planning. When a reps calls on a store account, the first question they hear is “What’s new?” As a manufacturer, you will need to have new product releases frequently enough so that your samples and sales materials come out of their bag and get shown, and sold, to the account. Get clear on how often other manufacturers in your industry release new products, how often your reps call on their accounts, and what you can do to maximize their efforts on your behalf.

 

There can be huge benefits to having effective sales representation, mainly that you will have opportunities that you never knew existed, and doors will be opened into new, exciting and profitable markets. Do your research so that you will be able to take advantage of this type of selling relationship and make it a great experience for both your company and your sales representatives.

 

Comments

  1. Hi Carolyn,

    I was referred to you by Meryl Hooker.

    This is an excellent post and I have added it to my blog: Selling to Gift Shops with a link to your site.

    Thanks so much for the excellent content!

    Sandy Dell
    Gift Rep Sandy

  2. I have worked with sales reps in the past, but stopped selling my products for a few years. How do I find a sales rep now?

    • Linda, There are a number of ways to find reps. Some people meet them at wholesale shows, either because a rep walks into their booth, or if they are walking the show, they may get the card of a rep who is working the show (contact them later on this). Shows also frequently have “bulletin boards” up with lists of vendors looking for reps.
      Another way is to ask shop owners who their reps are. They may be able to give you good recommendations.
      Or check websites such as manufacturers-reps.com or greatreps.com to list an ad.
      Look at trade journals, such as “Giftware News” for classified ads – some reps will advertise they are seeking lines. Or you can run an ad.
      Do you have friends in the business? Get referrals from them for reps. Find people in complimentary type businesses, who have reps who could cross-sell your products.

  3. I enjoy what you guys are usually up too. Such clever work and coverage!
    Keep up the fantastic works guys I’ve incorporated you guys to blogroll.

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