What to Expect When Dealing With Independent Sales Reps
What to expect:
Given that your independent sales reps are working for you, there are some things you can reasonably expect of them.
Market Reporting – Independent reps should also be notifying all of their principals of market trends and competition within their territories regarding any of that principal’s lines. Sales climates can vary significantly in different parts of the country, or around the world, and you need feedback to adjust your marketing strategies for those different regions accordingly.
Sales Forecasts and Budgeting – You should require your independent rep to submit sales forecasts for their territory, and to submit their expected budget. It is important to have these expectations set up in advance to prevent the sales rep from going over budget, and to ensure that they are not wasting time and money.
Customer Service – Without a doubt it is harder to acquire new customers than it is to keep existing ones. However, to ensure that you are able to keep your customers, it is important for your sales reps to play the part of customer service for your products. This can include equipment start ups, inventory control, assistance in setting up displays, problem solving, and helping to resolve conflicts and manufacturing defects and errors. Because of it, it is crucial that all new sales reps be fully trained in dealing with your lines so they can perform this service to the best of their abilities.
Full Burden of Expenses – Sales reps are responsible for any direct expenses within their territory, such as travel, automotive costs, hotel visits, meals, and so on. If there are national sales meetings, or if the principal requires their services outside of the sales rep’s defined territories, then the principal may need to reimburse their sales reps for time and expense. In general, the more customer service responsibilities the independent sales rep takes from the principal, the greater the commission rates that are paid out to the sales rep.
- Call Reports – Each of your reps should be sending call reports to all of their principals regarding sales visits related to the principal’s lines. If you are not receiving information or activity reports, you can assume generally that the manufacturer’s rep is not actively selling your product.
What NOT to expect:
There are also several common things that you should NOT expect of your independent sales reps. These are important to be aware of, to ensure successful dealings between the principal and the independent rep.
Application Responsibility – Reps should not be expected to take application responsibility, or the financial burden to resolve warranty issues. This is the responsibility of the principal.
- Inventory – Independent reps should not be expected to keep an inventory or take title of the line (meaning buy and resell). While some sales reps do offer these types of services, generally this type of business relationship is better left to distributors.