Sales Rep
Moderator: Brad Walker
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Barb Wolfe
- Posts: 3
- Joined: Mon Aug 04, 2003 12:25 pm
Sales Rep
A friend has expressed interest in becoming a rep or sales person for my work. Before I meet with her, I'm wondering if anyone can tell me of any experience they've had with this and also what a reasonable commission rate is.
commission is usually 15% of the invoiced amount, less freight & tax.
i have 3 reps. i know all of them personally.
one of them is especially productive, and i've turned over several house accounts to her because she visits the stores/galleries, and sells more, so the commission is worth it.
i like writing those commission checks ... the reps are well worth the $$ for the type of business i have. of course, other people's business models could be quite different.
i have 3 reps. i know all of them personally.
one of them is especially productive, and i've turned over several house accounts to her because she visits the stores/galleries, and sells more, so the commission is worth it.
i like writing those commission checks ... the reps are well worth the $$ for the type of business i have. of course, other people's business models could be quite different.
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K Okahashi
- Posts: 49
- Joined: Mon Mar 10, 2003 7:29 pm
- Location: Washington
Hi Barbara,
I would check on the following:
1. What type of product lines did she represent before? What type of businesses did she have as clients? What experience does she have marketing your type of work?
2. Is there is any overlap with products and any possible conflict of interest
3. References (even if she's a friend) this is a business relationship and be very clear up front. I'm sure you know the old saying about business and friendship. In my experience it's true.
4. Generally you can agree on a percentage (factoring that into your wholesale costs) or a flat rate. If you are doing major production or bulk orders, it can be based on the size of the order. I consider an agent a part of my marketing costs.
5. Pay the agent only after you receive payment. The agent is responsible to ensure you get payment as they are the liaison with the business.
6. Run the contract for a year at a time-with clauses to renew and for repeat business from larger buyers.
7. Get a self hep book on the laws in your area or contact an attorney to draft this stuff up. It's a large up front cost but can save you a lot of time from future aggravation and problems.
Hope this helps!
keiko
I would check on the following:
1. What type of product lines did she represent before? What type of businesses did she have as clients? What experience does she have marketing your type of work?
2. Is there is any overlap with products and any possible conflict of interest
3. References (even if she's a friend) this is a business relationship and be very clear up front. I'm sure you know the old saying about business and friendship. In my experience it's true.
4. Generally you can agree on a percentage (factoring that into your wholesale costs) or a flat rate. If you are doing major production or bulk orders, it can be based on the size of the order. I consider an agent a part of my marketing costs.
5. Pay the agent only after you receive payment. The agent is responsible to ensure you get payment as they are the liaison with the business.
6. Run the contract for a year at a time-with clauses to renew and for repeat business from larger buyers.
7. Get a self hep book on the laws in your area or contact an attorney to draft this stuff up. It's a large up front cost but can save you a lot of time from future aggravation and problems.
Hope this helps!
keiko
i like that idea of Keiko's about the year duration of an agreement, with renewals annually. i dont have any problems with my reps, but my situation is different because i know these people, and have been doing business with them for awhile.
but about the year's agreement, this is a great idea for a couple of reasons. for one thing, what if your friend gets some accounts, and they do well, and then she moves away? what are you going to do about that? my answer to that would be to continue to pay commissions thru the end of the contract year.
what if you dont like the way she works? you need to have an "out," but probably continue to pay commissions on accounts she got that are still producing. the "term limits" clause is a really good idea.
here's another thing to consider, if you haven't worked with a rep before. if a rep gets you an account, and it produces because the rep calls on the account, then obviously you pay the commission. if the store starts calling you directly, instead of the rep, you still pay the commission. i tell some of my best stores, who i have turned over to my hawaii rep, that just because i have the rep on board, it doesnt mean i'm not here to serve them, that they can still call me directly. nothing has changed. the beauty of having a local rep, in my case, is the rep lives on a different island than i do, and she has a quantity of my jewelry in her house. so, when she goes around to stores, she can fill orders, not just take orders. if a store calls me up and asks for some goods, i ask the rep to go over there and take care of it. i still pay her 15%.
also, as Keiko pointed out, you dont pay the commission until you get paid. the rep is responsible for getting you quality accounts with the financial strength to honor typical business terms of Net 30. so, if your friend is just starting out as a rep, and wants to try your work, you'll have to explain to her that she/you need to develop an Order form for the new account that includes credit references. maybe opening orders need to be COD. you'll have to figure it out as you go along. just dont extend too much credit in the beginning, and you'll probably be OK.
good luck --- it's exciting to get a rep, and see your business grow.
but about the year's agreement, this is a great idea for a couple of reasons. for one thing, what if your friend gets some accounts, and they do well, and then she moves away? what are you going to do about that? my answer to that would be to continue to pay commissions thru the end of the contract year.
what if you dont like the way she works? you need to have an "out," but probably continue to pay commissions on accounts she got that are still producing. the "term limits" clause is a really good idea.
here's another thing to consider, if you haven't worked with a rep before. if a rep gets you an account, and it produces because the rep calls on the account, then obviously you pay the commission. if the store starts calling you directly, instead of the rep, you still pay the commission. i tell some of my best stores, who i have turned over to my hawaii rep, that just because i have the rep on board, it doesnt mean i'm not here to serve them, that they can still call me directly. nothing has changed. the beauty of having a local rep, in my case, is the rep lives on a different island than i do, and she has a quantity of my jewelry in her house. so, when she goes around to stores, she can fill orders, not just take orders. if a store calls me up and asks for some goods, i ask the rep to go over there and take care of it. i still pay her 15%.
also, as Keiko pointed out, you dont pay the commission until you get paid. the rep is responsible for getting you quality accounts with the financial strength to honor typical business terms of Net 30. so, if your friend is just starting out as a rep, and wants to try your work, you'll have to explain to her that she/you need to develop an Order form for the new account that includes credit references. maybe opening orders need to be COD. you'll have to figure it out as you go along. just dont extend too much credit in the beginning, and you'll probably be OK.
good luck --- it's exciting to get a rep, and see your business grow.
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Barb Wolfe
- Posts: 3
- Joined: Mon Aug 04, 2003 12:25 pm
sales rep
Thanks for the great responses. They are very helpful as I have my first formal meeting with the potential rep this week!