Pros and Cons of Working with Sales Rep

Replies to This Discussion

Permalink Reply by Elise Muller on January 2, 2010 at 12:04pm

Hello Funlayo,

I tend to think it would be beneficial. I would interview the sales reps, see what they're distributing and how their sales are. What markets do they target, etc. You could possibly increase your pricing to accommodate their %? I am intimately connected to my products - sometimes I think another person (who appreciated and understood the formulations) could do a better job of marketing them. Perhaps you could make an agreement with them for a lower % for the first few months to see how well they do in marketing your line? Go for a "trial basis" before you sign anything.
Elise

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Permalink Reply by dM, CEO on January 2, 2010 at 1:18pm

Funlayo:

I like Elise's idea of having a trial or "ramp up" period. I suspect that it would need to be at least 3 months long, otherwise, there's not enough time for the rep to perform for you.

But the reality is that it depends on the rep. It's certainly great that you have people coming to you to rep your products, but who are they? Do they have experience? What references do they have? Do they know a lot about shea butter or are you going to have to educate them from the ground up? Do they have existing relationships with buyers or are they just starting out?

I'm sure you'll see variations and so you will want to negotiate differently depending on what each rep is bringing to the deal. It's hard to suggest what's appropriate without knowing this type of information.

But everything is negotiable, and generally, the rep with the most experience and who has the best references should earn the highest commission (assuming they back up their experience with results for you). People just starting out or using you to build their experience should not be treated in the same way.

Hope this provides food for thought.

dM

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Permalink Reply by Funlayo Alabi-Shea Radiance on January 2, 2010 at 1:44pm

Excellent information Elise and dM. I like the idea of the trial period (at least 3 months) and negotiating the commission. I'll keep you posted on the developments.

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Permalink Reply by Elise Muller on January 2, 2010 at 4:01pm

Did the reps come to you or did you locate them? I ask because this is something I may also consider - wondering where one finds a rep?
Good luck and please do keep me posted
Elise

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Permalink Reply by Funlayo Alabi-Shea Radiance on January 2, 2010 at 5:58pm

Hi Elise,

They were recommended to me when I was doing my rounds at some stores. I asked if they had any reps that they could recommend, and they did.

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Permalink Reply by Elise Muller on January 2, 2010 at 6:23pm

Thank you Funlayo,

You know what also may be a good idea - having women friends "rep" your line. (Think Avon business). Often times women have asked me to do this and I've offered them the opportunity (no one has stepped up). Single Mom's may be a good starting point - invite them over for a gathering / explain your products / perhaps some samples, and they in turn can "host" gatherings. I've often done "facial parties" (we steam, cleanse, mask, moisturize) and women love this. It's a "social gathering" plus the women leave with radiant complexions. I've often asked other women to present my line in this manner, but unfortunately, no one seems to have time. The commercial "Beauty Industry" targets ethnic women with extremely harmful ingredients - educating the consumer on this, as well as the abundance that nature provides with ingredients such as ours, might be another starting point. Just a thought ...
Regards,
Elise

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Permalink Reply by Funlayo Alabi-Shea Radiance on January 5, 2010 at 9:36pm

I've been burned a couple of time trying to sell this way. I still have product out there that I'm yet to get paid for. Also, it's a big headache and time commitment trying to keep track of what everyone is doing.

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Permalink Reply by IBN Member Jim DeBetta on January 3, 2010 at 7:16pm

Having run a consumer products company where I utilized the services of more than 30 independent rep groups at the same time for a number of years, I can tell you that "you get what you pay for" for the most part. I have close friends that are sales reps but experienced reps won't usually pioneer a line so to speak as it is too risky and they may not see a payoff for quite a while if at all. Please do not take this the wrong way. There are good reps out there but again having been in sales to retailers for nearly 20 years I can tell you that hiring the best you can afford is the way to go. When you run a company, it ultimately all comes down to sales and you should invest in sales and bring on the best you can get.

When I ran my company, I wound up hiring in-house sales people and my sales went through the roof as I had a concentrated team working for and reporting to me. Most reps handle many lines (as many as 15 or more) and so they simply cannot afford to work on your line for the amount of time you will want them to. My close friends that are reps work for larger brands and so they see no need to work for start-ups.

That all being said, you can always ask around at trade shows, etc and look for some good reps. They are out there and if you can find them grab them....and it is smart to ask them who they sell and make sure their contacts are relevant and current.

Jim

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Permalink Reply by Natalja Millsap on January 5, 2010 at 9:23pm

I also believe that good reps is the way to go. Or do it yourself. Nobody can represent your line better then you. But when it comes to friends, it's a waste of time. They would be more then happy to take your products for free, but to promote it to others.....sorry, to my experience they would rather go to the department store and buy well known brand, no matter that your products are way better. I have/had one friend who volunteered to rep my products and sold 2(!) jars last year. But when we talk about it, she sounds really proud of this "achievement" and tells me that she "works" really hard. What can you say to that?
I am finding it much easier and more profitable to work with people I don't know.

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Permalink Reply by Funlayo Alabi-Shea Radiance on January 5, 2010 at 9:38pm

I agree with you on all points raised. I forsee doing some of the rep work myself. My big challenge is following up and maintaining the account after the sale.

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Permalink Reply by IBN Member Jim DeBetta on January 6, 2010 at 9:08am

Good thoughts ladies....but let me rock the boat a bit...

Even though you may have a product you created and have the inner passion for it, it does not at all mean that others can't sell the product more effectively then you can. I mean no disrespect of course and just commenting in general and not specifically to either one of you or what you may have accomplished. What I mean to say is that if someone like myself who has had nearly 20 years experience selling to major retailers including TV shopping channels, dept stores, specialty retailers, mass merchants, etc and someone who invents a product has no experience, my money is on me so to speak. Those with experience have the buyer connections which is critical, they have deep knowledge of how each retailer does business and what they expect from vendors, they know how to follow up correctly and help the buying team construct marketing and POP scenarios, and overall know the landscape much better. Its like going to court without a lawyer. Would you? Would you perform surgery on yourself? I wouldn't...often it is best to either seek the assistance or even full blown help from experienced professionals who can do things much faster, more efficiently, and with less mistakes which can cost you dearly if you do a bad deal with a retailer. I know this sounds like me touting my own skills but I am just letting you know that in the end selling to retail is a tough and cut-throat business and attempting to go at it mostly alone without at least consulting with others could cause you problems. Retailers don't have the time or patience to deal with people that are not fully prepared to talk to them in a way that allows them to properly consider a a product. Believe me...I have been there :)

That all being said, I ran my company without others help for the most part and did well but I consider myself somewhat lucky at times and so many other factors helped to determine my success.

I am sure you ladies will do great but with such much available help and resources take advantage of it and that will give you the best shot at success. Good luck!!

Jim

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Permalink Reply by Funlayo Alabi-Shea Radiance on January 6, 2010 at 9:24am

Jim, I am very appreciative of your experience and insightful input to this discussion. I have had some success presenting the products to prospective retailers and being the 'face' of my brand. These retailers have been local businesses that are interested in buying local, so having the owner or creator of the line approach them is a bonus. That being said, I want to take the product line regional and national and I am fully aware that I will need an experienced rep to get me to the next level.
In your previous response you had mentioned that most experienced reps do not want the risk involved in a relatively unknown brand. How does a growing brand find a good rep?

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