How do sales agents jobs work, can businesses benefit from having self employed commercial agents selling their products and services, and is it the right career path for top sales people?
Here we explain how it all works for both sales people and the businesses whose products and services they sell. Once you understand the process from both sides you will be in a position to see if this is the best career move for you as a sales professional, or for your business a cost effective way to acquire new customers.
On this page we cover:
- Common terminology.
- Commission payments.
- What should be agreed by the commercial agent and the business.
- The next step to finding or offering an opportunity.
And how our service can find you the best sales people to sell your products, or present you with great opportunities to sell products in the UK.
Commercial Agents Common Terminology
Here’s some basic terminology to support your understanding of the topics on the website:
A sales agent is a sales person that works on a self-employed basis receiving payment in the form of commissions only for the sales they make.
The principal is the company that sales agents sell products and services for.
Commission is the payment made by a principal to the agent, at an agreed rate, in return for the sales made.
The EU Commercial Agent Directive 1993 was created to protect the sales agent and give them more rights. Agency agreements should take these points into consideration. For a summary of the agreement (not the official document, please see here). Also check out our interview with the European Commission here.
An Agency Agreement is the agreement made between the sales agent and the principal. We’ll discuss lower down the page what the agreement should cover.
Sales Agent Commission Payments
How much commission should a sales agent be paid?
Commission rates will vary from one principal to another and commission paid for sales of different products may vary within the same business.
As with employed positions, commission payments can be dependent on the margins that the company make, the financial value of the product or service that you sell, and the timescales of the sales cycle or order fulfilment.
Low value, quick turnover, products will have a lower commission percentage than high value items with a long negotiation period, because the sales agent is expected to sell more of the low value items.
As a guide, if you are selling high value items and you have to wait for the sale to go through long processes then 20% – 30% is reasonable. Bear in mind that the agent may have to wait longer for their commission.
If you are selling products or services that have a quick turnover, high volume, and even repeat orders, then you can expect around 5-20% but you should expect to see the commission sooner.
As a principal offering an agent opportunity you might want to have supporting evidence of sales numbers by other sales people over a period of time to give an indication of the commission that can be earned.
Sales Agent Agreement – What Should be Included
Each sales agent agreement may be different depending upon what they sell, sales areas, expected sales results, and many more variables related with customers and markets.
It would be impossible to write an all inclusive list of everything that should be included in an agreement but we’ve put together a list of topics that are often relevant for both agents and principals to consider. By seeing whether these topics impact your commercial agents operation and marketplace, and including them in the agreement, you can prevent problems in the future.
We discussed above about how much sales agents can expect to be paid in commission, but when it comes to a contract between the principal and the agent there are more details to include.
Both parties need to be sure on when commission will be paid, is there a set day of the month proof of sale needs to be submitted by, how long after a sale is made will the payment be made. How will it be paid, the usual way is by bank transfer but neither side should take that for granted. If it’s by cheque there is additional waiting time for it to clear.
What Counts as a Closed Sale
The principals must be clear on the definition of a closed sale. Is it a signed contract, a letter of intent to sign a contract or purchase products, or a cleared payment from the customer?
Does the buyer need to pass a credit check or have their account opened before a sale is counted as closed and allocated to the commercial agent? These may seem like minor points but if a sales agent loses commission over a technicality the relationship with the principal can break down.
Designated Sales Areas
Some sales agent opportunities give the agent a designated sales area. Where this is the case there needs to be agreement on:
Does the sales agent get rewarded for every sale on that area, and does that include repeat sales from existing customers.
What happens if a new or existing customer contacts the principal directly, will the lead be passed to the agent and will the sale be allocated to their figures?
What happens if a customer on the agent’s area orders from another office outside of the agent’s sales area. For example, a head office with an address outside of the agent’s area orders for a branch office that agreed a sale with the agent. An agreement now can head off potential conflict between agents on neighbouring areas.
If there is an allocated sales area there should be agreed terms covering any changes to that area.
When companies expand they often want to add more commercial sales agents to their team to increase sales, which is a reasonable action. This can mean that existing sales areas are reduced as new areas are formed and this could reduce opportunities for sales or result in existing sellers losing a profitable part of an area.
By covering all the details listed above, and others that are specific to the opportunities you offer as a principal or apply for as an agent, you prevent future problems and maintain a trusting relationship.
The Next Step
At salesagents.uk we specialise in bringing together sales agents looking for new opportunities and businesses looking for good sales people to sell their products and services in the UK.
Principals Looking for Sales Agents in the UK
For principals looking for sales people the next step is simple. Follow the link below and complete a brief form giving us details about the opportunity you are looking to fill. The more information you can give us about the opportunity, and the more appealing you can make it sound, the more successful your advert will be.
There are 2 services that we offer. The first is a basic advert on the website.
Then there is our Maximum Response service.
- Assist you with the wording of the advert.
- Send your opportunity to our sales agent register of top professional sellers.
- Actively use social media to get your advert noticed.
- And there’s no additional charge no matter how big your advert is.
To get your opportunity in front of UK sales agents go here.
Sales Agents Looking for Opportunities
We get new opportunities all the time. To be the first to know about new opportunities and get the latest news you just have to be accepted by us at Salesagents, there is no fee involved. Take the first step towards getting a regular supply of new sales opportunities by completing this form.
Also take a look at the latest opportunities on our front page.