Have you ever heard of sales agents?
As you are growing your business in international markets, there is an amazing way to expand your presence in overseas markets. I am talking about hiring sales agents!
Having hired and managed sales agents across Europe, I thought why not share a quick-guide to European Sales agents! Even though,I am drawing on my European experience with sales agents,you will find that you can still use and adapt this process to other parts of the world. In the USA sales agents are very common. They are very often organised as agencies with large teams of reps.
Imagine having 10 or 100 sales representatives representing your product on a daily basis in their region, driving around and carrying your business card! On top of that, you would just have to pay them on a commission on sales basis. Wouldn’t that be nice?
1- Be clear on what is a sales agent
A sales agent is a sales representative,however she/he is running her/his own business. That means that they are not your employee and they, of course, conduct their activities in the best interest of their business. That means you can’t ask them to report to you like you would with an employee. You can not impose that on them. However in practice, if you are working with good professionals, you will see that they will be keen to share as much information as possible with you.
Sales agents work for several companies. They can’t be dedicated 100% to your business. That is the rule. They carry your business card together with those of other businesses. If you ask them to work 100% for you, they can either ask to be reclassified as an employee and ask for the associated benefits. Or the local tax office, can force you to reclassify them as employees and you may have to hire them, as well as pay all taxes and social contribution they are entitled to.
2- Familiarise yourself with the local regulation around sales agents
Depending on the country, there may be a set of established regulations, rules and practices around using sales agents. When I established a network of sales agents in France for example, I often referred to the status of sales agents. It was great to have specific rules to refer to. For example, there is simple standardised contract used to engage an agent. If you need to terminate a contract with a sales agent, there is processes to do so. You know from the start that the agent has the ability to sell his portfolio to another agent and she/he needs to inform you if this occurs. If you want to stop their contract, you need to buy their portfolio at a preset price. The calculations are made very clear in the set of regulations. So it’s really great to know that from the start, what indemnity you would have to pay, if you wanted to stop that agent.
This set of rules exist in most European countries, and is a great tool for you to refer to.
3- What do they do?
Traditional sales agents, usually support your distribution network. They are here to work with them and push them to sell more of your product, making sure that the distributor keeps focussed on your product at all times.
Sometimes, agents may provide quotes to their distributors on your behalf, following your approval of course. In other cases, you may just want them to stick to product demonstrations, and sales activities without them providing quotes. They can also sometimes, and it is not always the case, visit end-users, and generate leads for their distributors. The agents that are able to do that are the best ones in my opinion. They usually cover a specific region, they are usually on the road four days per week and sometimes five days.
4- How do they get paid?
As mentioned before, sales agents are paid on a commission on sales only model. However, they can be specific arrangements that can be done, you just need to check what is feasible within the local regulations. Most of the time, they get a commission from 5% to 10%, depending on the value of the product they sell. You don’t pay for their travel expenses.
5- Where do you find agents?
That is a question I’m often asked. The truth is it depends on the industry. And they are hard to find, because they often are individuals. They are not easily visible as they carry other businesses’ business cards. There are industries where sales agents are very common and there are industries where sales agents just don’t exist. In Europe, for example, I rarely came across independent sales agents in the IT industry. I find they are more easily found for manufacturing , than for digital or software solutions.
There are many ways to find out if there are good sales agents in your industry in a given country. One way, I often use, is to contact my colleagues who are selling non-competing products in my industry, and I simply ask them the question: “Do you use sales agents? And what is their level of professionalism?”. The other way, is to ask the distributors I work with.
6- How do you select them?
The selection process is critical to your success with an agent. First of all, in my experience, it does not work when you try to force a sales agent to do, what they do not currently do in their day-to-day job. For example, asking a sales agent to focus on visiting end-users when they usually spend their week visiting distributors. If you take them too far outside their comfort zone and their routine it won’t work. The best way to check the way they work, is to contact the companies they currently have a contract with. You just ask them how it is to work with that person on a daily basis. Your distributors will tell you if they get good support from them as well.
As always I wish you booming international sales!
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