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How can I get an Independent Sales Rep to take my line?

Written by: Jeff Simon

Article Overview: I am new to the market. How can I get an Independent Sales Rep to take my line? Here are steps to improve the ability of the Rep to sell your product and help you to capture the Rep's attention.

How can I get an Independent Sales Rep to take my line?

I am new to the market. How can I get an Independent Sales Rep to take my line?

Your Hot Concept

You are excited about your new hot product or service. Everyone you talk to is excited. You know how to create or procure the item, whether domestically or via import. Up until now you have focused on these production or procurement aspects. But now you need to find somebody to sell it. So, you try to find Independent Sales Reps or a Rep Agency.

But wait! -- the Independent Reps I have contacted will not take my line!

The primary question that an Independent Rep has is whether they can sell the product or service at the intended price. When a product or service is unproven, has no track record, requires market research, and perhaps is not even fully developed, either the Rep is hesitant to take the line at all, or would do so under the condition that they are compensated for their product introduction efforts. In effect, they would be "building your business". In such cases, the Rep may require an up-front fee in some form. The best way to think of this cost is as a market development cost, and not as a commission.

Steps to take to gain the interest of an Independent Sales Rep

Here are steps to improve the ability of the Rep to sell your product and help you to capture the Rep's attention:

1. Have the correct wholesale price. It is common for an inexperienced Principal to put the wrong price on a product. Surprisingly, the price is often too low. When pricing a product, in addition to direct production costs, there are costs of production overhead, marketing, selling, packaging and shipping, damaged and lost goods, obsolescence, and not to be forgotten, the "all-important" profit!

Often pricing is accomplished by using a rule of thumb such as taking the costs of raw material and labor and multiplying by a factor of 2x or 2.5x to create the wholesale price. When importing, this factor can even as high as 3x to cover the additional damaged and lost goods plus importing mistakes.

2. Have the correct retail price. Typically a product will retail at the "keystone," or double of the wholesale price. Under this model, if you want to sell your product for $5.00, then it has to retail for $10.00. Be sure that you product is properly priced at the retail level.

3. Test market your product. To capture the interest of a Rep, it is much easier if you can show success in a test market. Without any proof that the product can be sold, the Rep or Rep Agency will rarely just take the product and start selling it.

For example, here are two type of tests applicable to the retail market:

1) Get a half dozen retailers in your area to agree to take your product on consignment. That is, they only have to pay you when your product sells. They must agree to pay your established wholesale price, and sell for your expected retail price for the test to be valid.

2) Attend a local flea market, fair, bazaar, craft show, or harvest festival. Sell at your retail price.

You will obtain critical market feedback from each of these exercises. The questions you want to answer are:

1) Does your product interest people?

2) What suggestions do they make?

3) Does it sell? Why, or why not?

4) Do you have the correct price? Was there price resistance?

5) And most important for the consignment test: will the buyers re-order the product?

With the knowledge gained from these tests, you are much further towards the goal of using an Independent Sales Rep or Rep Agency. Your success in the marketplace will pave the way for acceptance by the Rep. On the other hand, if the product does not sell or the retailer will not reorder, you have the market feedback needed reprice, redesign, or repackage your product. Or you may find that you have to discontinue the product entirely. You are ahead of the game as compared to where you would be if you tried a full roll out without a market test.

Related Articles
  What's the Big Deal About Independent Sales Reps?
  Preparing to Handle Independent Sales Reps
  How Can I Find Independent Sales Reps or Sales Agencies?
  What Independent Sales Reps Should Expect From Their Principals
  What to Expect When Dealing With Independent Sales Reps

Article Tags: independent sales rep



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