How to Use Sales Reps To Sell Your Product

By Neil S. Siskind, Esq.
Owner, Pres., The Siskind Law & Consulting Firm 

If you are wholesaler that does not manufacture your product, but, rather, you purchase a product from a manufacturer for resale to wholesalers who in turn resell the product to retail consumers, you need to know the quality of the product, the competition, and who your potential retail customers are. Once you have evaluated the product and the market, you need to determine your sales method. For traditional offline sales there are a few options. You may sell through a catalog, your own in-house sales team or using outside sales representatives (known as “Reps”).

Using an outside sales Rep has some excellent advantages. A sales Rep may be a single person or an entire sales organization. Using an outside Rep instead of an in-house sales team means that you don’t have to pay salaries, you don’t need office space, you may not need workman’s compensation insurance, you may not need health insurance for employees, and you can benefit from lower overhead such as office space and telephone expenses.

A sales Rep is a person or company that sells the products of others in exchange for a commission of each sale- generally between 8% and 15% of the sale price. This means that you only pay them if they succeed. Not a bad deal. Reps are valuable because they often come with experience selling a particular type or product, have local relationships with retailers and are local in geography so that you can sell in many places without the related expenses of having offices or traveling. Reps can be found on the Internet, at trade shows, through local chambers of commerce or trade magazines.

Any rep will not do. Just like any employee, you need to find one that is knowledgeable and reliable. You also need to find one that is trustworthy, as you don’t want someone making undue claims about your product or mistreating customers. So homework is in order. You also want to ensure that your product is getting the proper effort and attention needed to sell it, or else you will be wasting a great amount of time. Some of these issues you can only find out through time and working with a particular Rep. So investigating a Reps reputation and references is very important. Ask the upfront about their expertise, relationships and success stories.

Reps will not necessarily take on your product. They will want to see that their time will be well-spent and that the product is sellable. Time is money and they want good products to sell. So it is your job to sell them on your product and why they should work for you for free until they make a sale.

Once you choose a Rep that you feel is capable, competent, and is someone whom understands your product and market, have a written agreement so that everyone knows the commission and payment terms. Your Rep will need product samples and you should spend time with the Rep in person, or at least on the telephone, describing the product in details so that the Rep can sell the product as well as you could. This includes explaining about the competition so that the Rep can answer questions effectively regarding quality, usage and price.

Keep in contact with your Rep. Any Rep that does not keep you posted on a weekly basis, at least, and through some sales tracking technology, may not be the Rep that you want. You have to remember, the Rep is working for free until they sell and is not your employee, so you need to be patient and courteous. But you also need to feel like you are retaining control over the sales and pace of your business. Using outsourced services, including Reps, and perhaps, since they work on commission only, especially Reps, is always a delicate balance.

Contact the Siskind Law & Consulting Firm today to develop all of your business, product and sales strategies. We are An Entrepreneur’s Best Friend™.