Expand Your Business With Independent Sales Reps

by Guest Blogger Jeffrey Simon

An Independent Sales Rep or Rep Agency gives an excellent channel for increasing sales. Especially for startups or companies who cannot afford to develop their own in-house sales force, the independent rep, also known as a manufacturer’s rep, can be a winner and drive your business to the next level.

Advantages of Independent Sales Reps

Some of the reasons why you might want to consider using Independent Sales Reps:

1. Entrepreneurs: an independent rep is a business person who brings high motivation. Their compensation depends directly on their results; thus they are extremely “results-oriented” and really want to close the sale.
2. Speed to Market: because an independent rep has an existing base, getting your product into the channel is much faster than if you had to create the channel first. Reps already have relationships with the buyers in your market.
3. Experience: you don’t have to pay for training a new sales staff. The rep should already be up to speed.
4. Cross Product Capability: because a rep presents compatible product lines, their is a wider sales context than just the narrow target of your product. The ability to cross is a critical advantage of the independent rep.
5. Credibility: it is usually easier and cheaper to maintain a customer relationship than to develop a new customer. The rep has already established his credibility with his customers, and that credibility reflects on you.
6. Motivation: since the rep’s compensation is tied directly to his results, such reps can be more highly motivated than a salaried sales force.
7. Low Overhead: your direct cost for the rep channel are limited to training, sales tools, and samples.
8. New Vertical Markets: you may be focused on specific industries or vertical markets. The rep may bring in new applications for your products in areas not known to you.
9. Fast Response Time: as a small company, the rep can be more innovative and faster to respond. They also do not have the list of approvals required in some larger companies.
10. Cost Tracking: the commissions paid to reps directly follow the sales, giving an easy way to monitor sales trends.
11. Sales Force Longevity: the average salaried sales employee stays with a company two years. Successful independent reps often have a history of years of developing and maintaining clients in one territory.

Disadvantages of Independent Sales Reps

Be aware of the potential downsides to the Independent Rep channel:

1. Control: you have less control over the rep’s activities.
2. Communication: it is up to both parties to maintain adequate or superior levels of communication.
3. Sales Time: the flip side of the Cross Product Capability mentioned above is that your products do not get 100% of the rep’s attention.
4. Placing an Effective Rep: it may take some time and trial and error before you find those reps that deliver for your business. But this also applies to any of your in-house hires.
5. Branding: the sales rep is your face to the customer and will affect the way they see your company. This could be a drawback.

Commissions

How to set commissions is an area that is often asked about by those new to the independent rep channel. You may find some guidance on this topic at Determining Commissions for Independent Sales Reps or at discussions on the topic in the Manufacturers Rep group of LinkedIn.

About the Author: Jeffrey Simon

For over thirty years, Jeffrey Simon has been professionally active in financial management, information systems management, software development, and project management. Most recently he has been a founder and principal owner of RepHunter, Inc. RepHunter matches growing companies with qualified independent sales representatives. RepHunter is also experienced in helping manufacturers representatives find new product lines.

About RepHunter, Inc.

Contact RepHunter for help with the topics presented in this article.

RepHunter.net is a Minnesota-based company that provides manufacturers with experienced sales representation. We use a unique profiling system to facilitate a targeted search using specific criteria and our growing network of independent reps.

We are more cost-effective than placing traditional ads and wading through the resume response.

Our blog contains discussions of topics of interest to Independent Sales Reps and companies seeking to work with Reps.