Get Repped: The Benefits of Outsourcing Sales

When you started your business, chances are you were your own best salesperson. However, the increasing demands of a growing business may take you away from selling. For cash-strapped companies, the answer to the dilemma may lie in hiring an independent sales representative firm, says sales consultant Wayne M. Thomas, author of The Sales Manager's Success Manual. An independent sales firm can add muscle to your in-house efforts and help you land new customers without the cost of more full-time employees.

To decide whether outsourcing sales is best for your company, you need to consider some important questions, says Thomas.

• What is the best way to reach customers? Thomas says this is the most important consideration. If your customers are not accustomed to buying from an independent sales representative firm, you may find that the rep firm is ineffective in landing new sales. “If they're not landing sales, it doesn't matter how much money you're saving,' Thomas points out.
• Does the firm have a good reputation in the industry? It's important to align your brand with a reputable sales firm. Ask others in your industry, including contacts from your trade associations, former industry co-workers, customers and suppliers. The blog No Smoke and Mirrors also has some good questions to ask about a sales rep firm before hiring it.
• Does the firm represent competing products? This isn't necessarily a deal-breaker, says Thomas, but if the firm does represent products or brands that could be considered your competition, you need to have a frank discussion about how the firm handles conflicts of interest when it comes to the selling process. For example, the firm may only have the authorization to sell the competing product to certain customers or in certain regions. That leaves other areas wide open for them to place your products without concern.
• How will territories be broken down? Territories aren't only measured by geography, says Thomas. Sales rep firms may be limited to selling to certain types of customers (e.g., mass market retailers, specialty retailers, warehouse distributors, etc.). It's important for you to look at the types of markets in which you need sales support and find a firm adept at reaching that kind of customer.
• How will the firm be compensated? Most rep firms receive commissions on the sales they make. However, those commissions can vary widely depending on the type of customer, the industry and the volume of the sale. Because the cost savings from using a rep firm is in its free-agent status—you aren't responsible for payroll taxes, benefits or salaries—you don't want unpleasant surprises when it comes to compensating the firm, so be sure to have a clear agreement that maps out your relationship and its parameters. You can find some sample agreements online at FindLaw, but be sure your attorney reviews them to ensure they are valid and protect all of your interests.

Learn more about independent sales rep firms at associations like the Manufacturers' Agents National Association and the Association of Independent Manufacturers'/Representatives.

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