Sales Partners Agents Distributors Licensing and Franchises
Sales Partners Agents Distributors Licensing and Franchises
These sales partners have a lot to offer. But it's important to understand what each type of partner means for your business (equally so for online enterprises).
The term 'franchise' has become a common way of describing a business relationship where the franchisor allows other people to sell their products or operate the same type of business under the same name, usually within a designated area. But there is more to it than that. Much more. Legal obligations, management control, customer service and pricing are involved. And often 'franchise' is not the correct term for the relationship being offered.
Let's Have Some Definitions1
Agent: A representative for your company who will find buyers and sell your products. Also called a broker. Paid by commission on sales achieved. Stock is not usually held by an agent.
Distributor: An enterprise whose business is to buy merchandise for resale, usually to retailers or other industrial and commercial users.
License: A formal permission or authority to do, or not to do, something which otherwise would be a legal wrong. Often used when dealing with merchandise or procedures protected by trademarks and patents.
Franchise: A privilege granted by one organisation (the franchisor) to another (the franchisee) to sell, produce or use its products. Different types of franchises include:
A product franchise - which acts as an outlet for a particular product.
A system franchise (usually called a business format franchise) - which is authorised to conduct business according to a system developed by the franchisor.
A process or manufacture franchise - for which the franchisor supplies a critical ingredient or the know-how for a production process.
According to the Franchise Council of Australia the most common franchise method is the business format franchise, with 708 different systems being offered in Australia.
Typically each type of sales partner is subject to geographic restrictions of some kind, such as a pre-defined territory. Depending upon the situation this may be part of a metropolitan area, a state, or an entire country. Ideally the size of the territory should be based on sales and/or profitability benchmarks. This is sometimes tough to calculate for new products and services.
At times the definitions may overlap. For example a 'manufacture franchise' may be the same as a 'license' for a manufacturer to produce certain items. The legal boundaries can be quite puzzling and expert assistance should always be sought.
Of particular importance is the requirement of a business format franchise to offer comprehensive training, support, business management procedures and marketing programs. This all-inclusiveness is a hallmark of a true business format franchise.
It takes a long time to develop the systems and knowledge required to create a business format franchise that conforms to the Franchising Code of Conduct and that will be of interest to serious franchisees.
If you find that your products do not require the intensity of support required by a business format franchise then the other sales partner options may be more suitable.
From a simple commission-based arrangement with an industry sales agent (or broker), to a more formalised licensing deal that may offer exclusive territory and advertising support, there are opportunities to get your partners working for you to increase your overall sales.
Don't Just Leave It To Your Partner
However, it's not simply a case of thinking, "Let's sign a deal and let them worry about getting the sales". No matter which option you choose there will be ongoing communication and support required from you if you want your sales partner to get the best results.
And there are always potential pitfalls in any relationship. Remember, the less committed your sales partner is to you, the lower your products or services will appear on their priority list.
So here are a few things to keep an eye on if you want to stay on track for success:
Agents - Stay in regular contact. Sell them on your products. Get them excited. Make sure your commission is competitive. Do you have an exclusive arrangement with them? Try to avoid agents who also represent competitive products, as they may have a conflict of interest.
Distributors - Be aware of how your products fit with their ranging policies. Train their sales team. Help them to promote your products by way of co-operative advertising and sales incentives. Stay on top of any seasonal or dated stock. You don't want your distributor overstocked with old merchandise (because they will think twice before ordering current stock!).
Licensees - Make sure your legal documentation is sound. Gain a thorough understanding of your licensees business so you know how your product/service is being used. Are they committed to you for a period of time, number of units, or value of sales? Limit the license to their specific use so you are free to deal with other licensees.
Franchisees - Use a franchise consultant to help develop your package. Remember your selection of new franchisees will be of paramount importance - people make the business! Have procedures to measure customer service levels and operating standards (use random checks, mystery shoppers, contests etc). Gain co-operation and 'buy-in' from franchisees, rather than confrontation.
Sales Partners Online
It's no news to online businesses that they should use productive partnerships to increase their chance of success. For example:
An affiliate program can be compared to a sales agent.
Syndicating content can be compared to licensing (of the information).
Patented code/software is commonly used under license.
Always do your sums and make sure your choice of sales partner presents the best outcome for you. Look for commitment, synergy, innovation and growth potential in prospective partners - your future depends on it.
Sales Partners Agents Distributors Licensing and Franchises - To learn more about this author, visit Stuart Ayling's Website.
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When I'm speaking with clients who are looking for ways to expand their business the conversation often comes around to the possibilities of using agents, distributors, licensing arrangements or a franchise.
These sales partners have a lot to offer. But it's important to understand what each type of partner means for your business (equally so for online enterprises).
The term 'franchise' has become a common way of describing a business relationship where the franchisor allows other people to sell their products or operate the same type of business under the same name, usually within a designated area. But there is more to it than that. Much more. Legal obligations, management control, customer service and pricing are involved. And often 'franchise' is not the correct term for the relationship being offered.
Let's Have Some Definitions1
Agent: A representative for your company who will find buyers and sell your products. Also called a broker. Paid by commission on sales achieved. Stock is not usually held by an agent.
Distributor: An enterprise whose business is to buy merchandise for resale, usually to retailers or other industrial and commercial users.
License: A formal permission or authority to do, or not to do, something which otherwise would be a legal wrong. Often used when dealing with merchandise or procedures protected by trademarks and patents.
Franchise: A privilege granted by one organisation (the franchisor) to another (the franchisee) to sell, produce or use its products. Different types of franchises include:
A product franchise - which acts as an outlet for a particular product.
A system franchise (usually called a business format franchise) - which is authorised to conduct business according to a system developed by the franchisor.
A process or manufacture franchise - for which the franchisor supplies a critical ingredient or the know-how for a production process.
According to the Franchise Council of Australia the most common franchise method is the business format franchise, with 708 different systems being offered in Australia.
Typically each type of sales partner is subject to geographic restrictions of some kind, such as a pre-defined territory. Depending upon the situation this may be part of a metropolitan area, a state, or an entire country. Ideally the size of the territory should be based on sales and/or profitability benchmarks. This is sometimes tough to calculate for new products and services.
At times the definitions may overlap. For example a 'manufacture franchise' may be the same as a 'license' for a manufacturer to produce certain items. The legal boundaries can be quite puzzling and expert assistance should always be sought.
Of particular importance is the requirement of a business format franchise to offer comprehensive training, support, business management procedures and marketing programs. This all-inclusiveness is a hallmark of a true business format franchise.
It takes a long time to develop the systems and knowledge required to create a business format franchise that conforms to the Franchising Code of Conduct and that will be of interest to serious franchisees.
If you find that your products do not require the intensity of support required by a business format franchise then the other sales partner options may be more suitable.
From a simple commission-based arrangement with an industry sales agent (or broker), to a more formalised licensing deal that may offer exclusive territory and advertising support, there are opportunities to get your partners working for you to increase your overall sales.
Don't Just Leave It To Your Partner
However, it's not simply a case of thinking, "Let's sign a deal and let them worry about getting the sales". No matter which option you choose there will be ongoing communication and support required from you if you want your sales partner to get the best results.
And there are always potential pitfalls in any relationship. Remember, the less committed your sales partner is to you, the lower your products or services will appear on their priority list.
So here are a few things to keep an eye on if you want to stay on track for success:
Agents - Stay in regular contact. Sell them on your products. Get them excited. Make sure your commission is competitive. Do you have an exclusive arrangement with them? Try to avoid agents who also represent competitive products, as they may have a conflict of interest.
Distributors - Be aware of how your products fit with their ranging policies. Train their sales team. Help them to promote your products by way of co-operative advertising and sales incentives. Stay on top of any seasonal or dated stock. You don't want your distributor overstocked with old merchandise (because they will think twice before ordering current stock!).
Licensees - Make sure your legal documentation is sound. Gain a thorough understanding of your licensees business so you know how your product/service is being used. Are they committed to you for a period of time, number of units, or value of sales? Limit the license to their specific use so you are free to deal with other licensees.
Franchisees - Use a franchise consultant to help develop your package. Remember your selection of new franchisees will be of paramount importance - people make the business! Have procedures to measure customer service levels and operating standards (use random checks, mystery shoppers, contests etc). Gain co-operation and 'buy-in' from franchisees, rather than confrontation.
Sales Partners Online
It's no news to online businesses that they should use productive partnerships to increase their chance of success. For example:
An affiliate program can be compared to a sales agent.
Syndicating content can be compared to licensing (of the information).
Patented code/software is commonly used under license.
Always do your sums and make sure your choice of sales partner presents the best outcome for you. Look for commitment, synergy, innovation and growth potential in prospective partners - your future depends on it.
Sales Partners Agents Distributors Licensing and Franchises - To learn more about this author, visit Stuart Ayling's Website.
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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