Independent Sales Reps – Everything you want to know about

Independent sales reps is a person that help sell products and services to a customer base in the targeted region which may or may not be defined by the companies for whom they work. These representatives are mostly free agents and work on a commission basis. However, sometimes a fixed salary may also be presented to them in combination with the commissions during the term of employment. Besides working in individual capacities, the agents can also work in collaborative arrangements. Products and services from more than one concern can be pushed in tandem to a common audience.

There are different industries where these manufacturers’ representatives can find employment opportunities. These include real estate, retail, healthcare and pharmaceutical industry along with food, agriculture, restaurant business and construction. Companies may choose to exclusively use these independent sales reps to push sales or utilize them in combination with their in-house direct marketing team.

The functions of the independent sales reps

While the responsibilities of the independent sales reps vary in accordance with the type of concern they are presently working for, some basic functions remain the same. These are as follows.

  • Touching base with new/existing clients, understanding their needs and explaining to them how specific items can satisfy those requirements.
  • Quoting prices, bid specifications and credit terms.
  • Answering client FAQs. These may relate to the products in question, benefits associated with it, availability and prices involved.
  • Providing emphasis on the product features. This is based on client need analysis, the product capabilities and its technical aspect.
  • Negotiation of sales terms, service agreements and prices.

Besides these obvious duties, there are other functions these independent representatives perform. These include market research and development, customer service, sales analysis, sales/product training and demonstration. They also suggest product improvements based on their findings and customer dealings.

The simple product selling does not signify the end of the manufacturers’ reps duty. Seeing to the delivery of the item in question to the desired location and ensuring the customer satisfaction is also the part of the whole process. Sometimes the reps also need to go for reorders on behalf of client before the actual sales closing can take place.

The benefits of employing independent sales reps

In the early stages of business it is possible to manage the various processes since these are quite minuscule to begin with. However, with gradual growth and development the pressures of increasing stores and territories may start getting to the organizations. The SME are not in a position to hire a full-fledged sales team for handling expanding marketing scenarios. Independent sales reps can be the ideal help at hand for dealing with such challenges.

Here are some basic benefits of independent agents.

  • Helps organizations to break into a specific industry scene.
  • Opens the door of communication with important retailers.
  • Provides insight into the market situation and the competition around.
  • Help in getting a competitive edge over others.
  • Bring their existing area and customer knowledge for boosting sales.
  • Allow business expansion beyond local, regional and national boundaries.

Benefits of multi-line selling

One of the benefits of hiring independent sales reps is that they pave the way for multi-line selling of products. In order to decrease their efforts and increase the chances of commission, these agents tend to sell similar products from various manufacturers in the same locations. This helps in the creation of a synergistic effect which in turn encompasses a broader customer base and a comprehensive coverage. This leads to increased sales because of a deeper penetration of the market.  In a broader sense, the multi-line selling strategy of the independent agent helpsto lower the product cost by increasing the manufacturing efficiency.

Benefits for new businesses

New businesses can do away with the expenditure associated with the maintenance of a sales force. The travel and phone expenses associated with product marketing and selling is taken care of by the independent sales reps themselves. The background and experience of the representatives allow for better sales results as compared to in-house staff the SME can ill afford. They require minimum direction and understand thoroughly what is required of them. This leads to lesser management time.

Benefits for exporters

Exporters can tap the overseas market potential to the dregs by employing the independent representatives. They offer an easier option when compared to starting joint ventures with foreign partners, establishing offshore branch offices or going the extra step and setting up a foreign company. With foreign agents working on behalf of the exporters the up-front expenses lessen up considerably and the chance of brushes with the laws of the country also decrease. Stability issues in a new land are taken care of and even the foreign tax liabilities get reduced. These independent representatives bring with them their knowledge of the land, people and the governing system to the export business for maximum possible success and expansion.

Independent sales reps payments

The Independent sales reps make money as and when they are able to sell products. This motivates them to work hard and close large volume sales. Agreements are signed with the companies with regards to various terms and conditions. These agents may work for a commission, buy/resell basis, or on a retainer basis which remains fixed. The payment arrangements can be any one of these or a combination of all three. The amounts remain specified in the agreement signed. The percentage of commission paid to them depends upon the product, industry, sales performance, pricing and a variety of other factors. Organizations employing the independent sales reps may choose to increase the levels of commission on a quarterly/monthly basis for motivational purposes.