sales reps

Who needs them? Maybe you do and maybe you don't.

For one thing, with the sole exception of jewelry reps, they are few and far between in the handcraft industry. For another, they are just one more middleman between you and that customer who delights in your eloquent objects. On the other hand, artists’ reps are a traditional means of garnering exposure for the 2D and sculpture crowd.

If you are thinking about allowing someone to represent you and your product as part of your distribution system, make certain that you interview them carefully up front to find out as much as you can about them. Do they run their operation out of a showroom, or are they road warriors? What other lines do they represent, i.e., complementary or competitive ones? Ask for references, and then actually check them out. Don't sign an agreement without negotiating it first – questions about commission rates, territories, exclusivity arrangements, the handling of catalogs and house accounts all come into play here.

So you're a newbie to the wholesale game, and you'll do pretty much anything to increase your distribution; but as a newbie you don't hold many cards when negotiating with your new sales rep. Here's a typical scenario:

And here's a typical end to this scenario. After loading up your new SR with a thousand dollars worth of product, six months down the road you find that not many new accounts are being opened up in that territory, and the house accounts that you turned over and are now paying a commission on are not reordering as much or as fast as they used to. Those few new accounts you've gotten were obtained at the trade shows, and you are the one who wrote those orders while you were working your part of the booth. So you tell the SR that this just is not working out. You stop paying commissions, and now no one is working the territory. You are out the samples, and now some of your savvy retailers are asking you directly for discounts because they know you had enough padding built into to your price to pay a commission in the first place. What's wrong with this picture?

And even if you make the golden widget that everyone just has to have, so that your sales are doubling every six months, you still have some problems. Not the least of which is that fifteen or twenty per cent of your gross going out the door every month. It doesn't take a rocket scientist to figure out that working a trade show in your very own booth once in a while is a whole lot cheaper in the long run. If your product sells itself anyway, why do you need a third party in the distribution chain – just stand there and take those orders yourself!

If you positively, absolutely must have sales reps, then do yourself the favor of following these guidelines:

In twenty plus years with the Stoneworks, I worked with more than thirty people who claimed they could sell our knives. Only one of them produced as advertised, and he gets a gold star. If I could have cloned him and dropped his clones into other territories (he wouldn't work anywhere but in Arizona), I would be a rich man today. All the others just drifted off with thousands and thousands of dollars worth of samples, and left a sales territory in complete disarray. Just for spite, one of them even took on a competitor's line!


   
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