“Sales Agents” are independent professionals whom you can contract to sell your products or services on your behalf for a commission. Sales agents are rarely in possession of any of the products that they sell. Buyers usually deal directly with the supplier or manufacturer (principal) once the sale has been made. Rarely do professionals in this field dedicate all of their efforts to one company because the commission from only one principal is sometimes not enough to earn a living. The more established of these agents have an established network of clients that share the need to be supplied by the agent´s offer that they can regularly use. Businesses can engage sales agents in order to penetrate new national, regional or international markets that they are not familiar with.

How to find them

If you decide to use sales agents in your business you must accept and learn to live with the fact that not all of them will be high performers.  This means that you have to place a lot of them in different locations in order to squeeze the most out of your sales initiative.

Some of the methods used to get sales agents include placing ads on job boards, in newspapers or hiring ad agencies.  You can also visit trade shows to meet with different independent agents or agencies in your line of business. Always remember that networking is very important; do so as much as possible with clients, customers, and just about anyone you meet at trade shows, who could provide you with multitudes of potential contacts in the industry.

The pay structure

The rate of commission is usually the number one term you want to negotiate. Depending on your industry and products, typical commission rates may range anywhere from 5 to 25% of the sale. It might be hard to negotiate a rate that’s lower than the standard for your industry or that product category, especially if you want to recruit top-quality salespeople. So keep the percentage within reason by looking at product cost, the time it takes to make the sale, and typical sales volumes. To get an idea of your industry standard, attend trade shows and network with people from other companies.

Higher priced items sometimes usually pay a lower commission, but it ultimately depends on the sales cycle and what is required of the agent; the more effort that is required to sell the product, the higher the rate should be. Always try to pay your sales agents their commissions on time and accurately. Failure to do so can quickly lead to the loss of your agents and your company developing a bad reputation with other prospective agents.

Training and support

You will need to think about structuring your training so that your agents can learn your company’s products and services quickly and move on to what they do best, selling. You must therefore invest time and effort into producing training materials for your current and prospective sales agents. Even the most experienced sales professional will need to learn about your company and product lines, so you must account for this and take agent onboarding seriously.

Contract

Once you have found some potential agents, the prudent thing to do is to have them sign an agreement. That being said, you have to first understand the terms of any contract before using it on your agents.

Exclusivity is an important consideration when signing on independent sales reps. While you want to find agents with lots of expertise, experience and contacts in your business category, you do not want them to have conflicts of interest by also working with any of your competitors. There need to be set boundaries for where the agent can sell and to whom. You do not want the person to interfere with your operation or even worse, your other salespeople in the region.

The contract should cover pricing, a specific quantity of goods sold, commission, geographic jurisdiction, duration of the contract, etc. The more specific and clear it is, the more useful it will be for enforcing everything you expect done.

Because it is important that you establish a clear understanding of how to get out of the contract should it not work, you must also include a clause about contract termination for when the person fails to complete his or her responsibilities.

Communication

Manufacturers can choose to hear from their sales agent as often as they deem necessary for measuring progress. This is negotiated in the contract, and the trick is to set a minimum goal – say, monthly or quarterly emails, telephone calls or Skype conversations – to ensure regular communication. You must, however, avoid trying to use this to micromanage your sales agents. Furthermore, you might also include a statement in the contract that encourages suggestions of new product ideas based on local market trends as well as leads from customers that might lead to new products or new avenues for growth for both parties.