Tips For Working With Reps
Placing productive, independent sales reps is a numbers game. Period.
Using RepHunter.net will improve those numbers but most likely, you will need to communicate with several reps in order to place the one that will ultimately be productive.
For example: to have 10 productive reps you may need to place 30. To place 30 reps you may need to have discussions with 100.
Therefore, it is important that you proceed with the proper understanding. These tips are designed to help you do so.
- Best Way to Place Reps – A Three-Step Process
- First, you need to find reps in the right markets and communicate with them. That is what you pay RepHunter to help you do.
- Second, you need the reps to take your line. In this, getting reps is no different than getting customers. You need to do everything that you can do to create the right professional impression so they want to represent you.
- Third and most important is the screening process. At this point, quite frankly, you are not concerned with what the rep has done in the past or what they have to say today. What should matter to you is that they can move your line and put money in your pocket. Once the rep accepts your line, we suggest you hold off on long-term agreements but rather use a simple Letter of Intent as described below. The Letter of Intent is nothing but a "handshake in writing" that will protect both you and the rep should they sell. But more importantly, it puts your rep into a probationary period where you can clearly map out your expectations from the time they accept your line to the time you expect results.
At the outset of any independent rep relationship you are simply trying to find someone who can sell and whom you can trust. The big value to you is the preexisting purchasing relationships that the rep has with his buyers. So, you simply need them to walk into their accounts, tell them that they now represent you and you need them to send you some business. Your Letter of Intent will map out your expectations regarding the time frame of those expectations.
- Create a Professional impression
- Placing an independant rep or manufacturer's rep is like getting a new customer. You do every thing you can to create a professional impression so the rep is willing to represent your line.
- The number one reason that a rep will not take your line is that they do not perceive your company to be professional and reputable.
- All communication, phone calls, emails, etc. must be professional.
- Patience and Persistence
- As we said above, placing a rep is like getting a new customer.
- You must exercise patience while waiting for reps to respond and be persistent when necessary.
- Note: request contact with the rep via phone AND email TWO times. Call once immediately. If no response, then call again in one week. Then, if the rep does not respond, use the Rep Credit link and the rep will not count against your contact allocation.
- Use a Letter of Intent
A Letter of Intent can be a one page email that identifies the basic points of the original probationary working agreement. It should identify:
- the probationary time frame;
- mandatory communication schedules;
- progress milestones;
- a clear cut vision of your expectations for the probationary period.
- Click here for an example Letter of Intent.
- Commission Amounts
- 90% of all commissions paid to reps are between 5% and 20% based on gross sale amount.
- Commissions differ with each industry.
- The best way to establish your commission amount is through conversations with interested reps in your industry.
- It is best to establish a relationship with the rep before sending any samples.
- Depending upon the cost of your samples, the best way to protect yourself from reps not returning samples is to have your reps "secure" the samples you send with a credit card. "Secure" here means "authorize only--do not capture" the cost of your samples.
- You only charge the card if the rep does not work out and you do not get your samples back.
- Contracts and Exclusives
- Long term contracts and exclusives must be an incentive, not an entitlement.
- Long term contracts and exclusives should be discussed AFTER your rep produces a purchase order for your product.
- Click here for an example Sales Representation Agreement.
- What If A Rep Responds "Not A Match?"
- You can still benefit from contact with such a rep.
- Send a response email including the following points:
- A "thank you" for considering your offer.
- A clear description of why your opportunity makes sense.
- A request to contact you should they find a home for your product in the future.
- A request for names of anyone they know that may in interested in your line (a small finders fee could jog their memory).
- Understanding Up-Front Fees Requested by Reps
Reps may require up-front fees when they have to expend time and effort to build the market or the channel, or even in effect, create the business, which is not that uncommon. Sometimes Principals will not properly understand these facts without communication and explanation.
Such Principals usually can be brought to an understanding that a rep cannot afford to work speculatively for long periods, such as 6 months or longer, without any compensation. Sometimes such fees are considered as advances against future commissions.
The RepHunter Terms of Service specify that any rep who does charge such up-front fees must disclose that condition by checking the "Requires Up-Front Fee" box on their profile.
Additional advice regarding up-front fees
- The Rep requesting an up-front fee must clearly communicate their policy for upfront fees to the Principal.
- The Principal should understand that upfront fees are to guarantee access to the buyer; no guarantee of sales is implied.
- Both parties should be aware that upfront fees can be negotiable;
- Paying an upfront fees implies that the principal is getting some promised value.
- The Rep must clearly communicate policies on return of samples and shipping costs for such a return.
- The representative agreement signed by the parties should describe the details described here.
- The principal is advised to obtain references from those who have previously paid the Rep's requested up-front fee.
- If RepHunter gets complaints from our Principals regarding default on the representation agreement, especially in connection with up-front fees, or if we deem that the Rep is not properly meeting the above requirements, we will remove the Rep's access to the RepHunter service.