Your product is finally ready! After months of research & development, quality testing, market research, and so on, you are finally ready to start selling to customers. You may even have several independent sales reps interested in selling your products! Wait a minute, “how do I know which reps to use? Should I use all of them?” Maybe, but first you need to screen them.
Screening your sales reps is an important step to take in the selling process to ensure that you are working with sales reps that are a good match for your company, are able to sell your product, and will treat you with the same level of professionalism you show them.
The first step in this process is the use of a Letter of Intent. In this letter, you will want to identify the time frame during which the sales rep will be in a probationary period. You should establish mandatory communication schedules, progress milestones, and a clear cut vision of your expectations for the probationary period.
The idea is to create an agreement with the rep that shows them what you expect them to be able to accomplish which allows you to evaluate their progress and capabilities in a concrete way. If they do not meet your stated goals, it’s up to you whether you wish to adjust them, or simply part ways with that rep. Some manufacturers reps may not work out as well as you hope, while others will perform well above the expected level. It’s not really possible to be sure what category any rep will fall into without working with them first, and having a letter of intent provides a secure way of ensuring a rep will do great work for you and your product.
An example letter of intent can be found at: https://www.rephunter.net/docs/LetterOfIntent.pdf
In general, commission-only sales reps are highly motivated; the reason is in their name! Since they get paid only based on what they sell, if they don’t sell, they don’t get paid. This is in part a security measure to ensure that any sales rep will do their best work for you! That being said, you don’t necessarily want to work with reps who are not meeting your expectations. What doesn’t cost you money directly can still be a drain on your time, and other resources.
Another important factor in dealing with sales reps is how you handle sending them samples. In general, you will need to send samples to your sales reps to facilitate their ability to sell your product. However, you generally want to establish a relationship with the rep before sending them any samples. In the event that a sales rep does not work out for you, you can’t guarantee they will return the samples you send them, so it is important that you have a relationship of trust built up with them before you send them your valuable materials. Even when that relationship is established, you will most likely want to have those samples secured with the rep’s credit card, which you only use to charge the card if you do not get your samples back when the rep is finished working for you.
Sales Rep Agreements
But what if my new sales rep is pressuring me to draft a contract? Well, basically, a sales rep is not entitled to a contract! Long term contracts, as well as any exclusives, should be an incentive for the rep to produce purchase orders, not something they feel entitled to. You don’t necessarily want to be discussing contracts until after your rep has produced results!
You can find an example of a Sales Representation Agreement here: https://www.rephunter.net/docs/SalesRepAgreement.pdf
Basically, you are trying to find someone who can sell, and that you can trust. The biggest value a Sales Rep can provide you is their preexisting relationships that the rep has with his/her buyers. You want them to go to their accounts, inform them that they now represent you, and you need them to send you some business. It doesn’t need to be that blunt, but in essence it’s exactly what you’re looking for!