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A: Many companies decide to
expand their sales efforts by utilizing manufacturers agents. The
major reason is the misconception that manufacturers agents do not
cost the company anything unless they close an order. Identifying,
training and motivating agents can be a very time consuming and
expensive exercise. That is not to say, that the use of agents is
not the best method to increase sales for many companies, it is just
not a “no” cost solution.
Creating a sales force comprised of
manufacturers’ agents requires patience and a great deal of effort.
The manufacturers’ agent company only earns revenue if they
successfully sell the products or services of the businesses that
they represent. In most cases, their field sales people are
remunerated by sharing a portion of
that commission. Human nature then prevails, the manufacturers
agent's field sales force will actively
promote the products and services that are the easiest for them to
sell and hence provides them with the best possible income.
It goes without saying that if there
were sufficient business in the agents’ territory for your products
to support a sales office then you would have put a factory sales
person into that area. When choosing a manufacturers’ agent it is
important to ensure that, the customers that they are currently
selling to are the customers who potentially will buy your product.
The agent wants and needs to sell multiple product lines to the same
customer on any individual visit, in order to maximize his income
and cover the cost of the sales call.
It is up to you to educate the
manufactures agent’s field sales force and to have a factory sales
representative accompany them on sales calls within their assigned
territory, on an ongoing basis. You must show the agent how easy it
is to close an order for your products or services. Nothing will
motivate an agent more than receiving a commission check for selling
your wares.
In the same manner that you wouldn’t put a sales person
into the field in your home market without being properly educated
on the product, you can’t expect the manufacturers’ agent to have any
less of an education requirement. In fact, it requires more effort
because the agent has many principals who are all vying for his time
and attention.
One of the common mistakes in dealing
with a manufacturers’ agent company is that you sell and train one
senior individual within that organization on your products and then
expect them to disseminate this information to their field sales
force. What you end up with is the blind leading the blind.
I
can’t emphasis enough, that the training and support must be given
directly to the agent’s field sales people. If you are about to
contract with a manufacturers agent and they will not give you
direct access to their field sales people for training and sales
support, then go no further – find another organization to sell your
products or services.
It is also important that any
promotions that you implement, such as increased commissions for a
period of time, to motivate that sales force end up in the hands of
the people who are actually in the field selling, not in the company
coffers.
As a final note, no matter how much
due diligence you do on selecting manufactures agents before
contracting with them, a percentage will just not work out. Do
not hang on to agents that are not performing, terminate them and
find someone else. Make sure that your representation contract
allows you to terminate easily and efficiently.
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