As a company owner or manager with an existing sales team your thoughts might be turning to increasing revenues by expanding the sales team but worrying about the costs and risks associated with bringing in another employee.
Could a sales agent be one route to building the team as an alternative to adding a traditional sales representative?
Sales, commercial, or manufacturers’ agents work on a self-employed basis and you only have to pay them commission for the sales they actually secure resulting in a fixed cost into your sales strategy rather than the potentially large overhead. There’s no basic salary, no company car, no holiday pay, no pension payments and generally a lot less support needed compared to an employed sales person.
As they only receive commission when a sale is made they’ll be very self-motivated and can hopefully work without the close supervision a new employee might need.
Only being paid commission the amount they will need to be paid per sale will obviously need to be more than a salaried sales executive receives but if they have a portfolio of non-conflicting products that they sell to an existing customer base there are mutual benefits to both you as an organisation and the sales agent. The prospect of adding to their income while selling to existing customers makes it an attractive proposition for Sales Agents.
How Can a Sales Agent Fit into Your Sales Strategy?
The introduction of conflict within your sales force by taking on a commission-only sales agent has to be avoided at all costs and the best way to negate this possibility is to ensure that the agent’s role is very specific, for instance to cover a new territory or to introduce new products and services that you supply. Using agents to cover sales territories that are remote from the head office can also save management time and resources and as they can work on their own they will avoid conflicts with existing sales representatives.
Benefits to Small Businesses
Recruiting and managing sales people can mean heavy demands on the resources of a small business.
Not all small businesses need a full time sales representative so having a self-employed agent selling for them, and presenting their products along with other products from other suppliers, could be the best solution.
Sales are crucial for the survival of a small business. If an employee doesn’t get the required results it can take weeks or months to manage, mentor and train them, or if that does not succeed to manage their release.
The obvious downside is demotivating your existing employee sales reps and this is where the old adage of “honesty is the best policy” emerges.
Trying to keep the two “sides” separate will almost certainly lead to conflict especially as the sales agents will be in receipt of a higher commission than the full time employee.
The full time employee needs to understand your reasoning behind employing the sales agent and how the sales agent is remunerated. Don’t forget to stress the security and benefits the full time employee receives.
In conclusion adding a Sales Agent to your existing team may be a sound strategy but it needs to be thought through and communicated to all the participants.