The Use of Independent Sales Representatives

By Robert Estupinian

 

One area that I often consult with involves helping organizations that want to expand into different territories in order to increase their market share.  Many times the market opportunities are located in different areas where the organization does not have an existing office.  Although the market potential may have been properly investigated in advance there is nobody in the organization that has personal knowledge or contacts in the proposed area.

 

At times companies try to hire a salesperson, train them, and then set them lose in the territory hoping that they will be able to mine the market share that their research showed. In most instances I find that these companies end up hiring and training many salespeople without ever realizing a return on their investment.

 

A different approach to this problem is using the services of independent sales representatives. These folks are seasoned sales professionals that not only know the sales territory, but have established contacts in that area. In most cases you will find that these professionals need very little training and very little supervision. Often you will find these salespeople selling complementary services and products and thereby allowing your organization to benefit from their established relationships. An added benefit is the cost involved. Since these sales professionals are representing more than just your company they are 100% commissioned thereby limiting your labor and benefit costs.

 

By using this type of sales professional you can test the market to see if your product or service is viable before investing heavily into the new market. The length of the relationship can take many forms from a temporary engagement to hiring them full time to work exclusively for your organization. Remember that managing these professionals is different than managing the rest of the sales force. By their nature independent sales representative do not like to be micro managed and instead like to be considered more like valued vendors. The beauty of this arrangement is that you are not locked in or highly invested in the relationship and in most cases you can terminate the relationship rather quickly.

 

A few years ago a new manufacture of medical implants wanted to offer their products in Northern California but was dealing with limited resources. I recommended that they consider using the services of independent sales representatives in the targeted marketing area that were selling complementary products to the same audience. Within a month we had identified several independent sales representatives that sold medical equipment to the doctors in the Northern California area. In less than ninety days this new manufacture had effectively established itself in the market and was beginning to enter new markets using the same process.

 

If you would like more information on how to incorporate an independent sales representative in your business, please contact our office.