What to Expect When Dealing With Independent Sales Reps

Guest post by: Jeff Simon
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What Independent Sales Reps Should Expect From Their Principals - By Jeff Simon

What to expect:

Given that your independent sales reps are working for you, there are some things you can reasonably expect of them.

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.

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.

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.

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.

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.

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What Independent Sales Reps Should Expect From Their Principals - By Jeff Simon

About the Author: Jeff Simon

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For over twenty-five years, Jeffrey Simon has been professionally active in financial management, information systems management, software development, and project management. Most recently he has been a founder and principal owner of RepHunter, Inc., a successful startup conducting business over the Internet. During the last two decades he has been employed by GE Capital, and has consulted for clients including American Express, CIGNA, IBM, and Xcel Energy. He has conducted advanced technology training in the international enviroment, including seminars attended by representatives of the U. S. Government, the Canadian government, the British government, NATO, Boeing, DuPont, Exxon, General Electric, Grand Metropolitan, Hewlett-Packard, IBM, Monsanto, Siemens, Westinghouse, and numerous other major corporations. His recent interests include the application of artificial intelligence to analysis of the stock market. Jeffrey was graduated from the University of Minnesota Summa cum Laude in Mathematics, and holds an MBA from Pepperdine University. He may be reached at jas@rephunter.net.
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