Table of content:

Selling Through Sales Agents – How it Works
Benefits of Including Agents in Your Sales Strategy
Define Your Sales Agent Requirements
How to Find Sales Agents
Selecting Sales Agents
How Much Commission Should I Pay?
The Contract
A Quick and Easy Way to Find Sales Agents

Selling Through Sales Agents – How it Works

Here’s a quick overview that explains how the relationship works when businesses, like yours, sell their products and services through sales agents.

This section will give you an understanding of:

What types of businesses include sales agents in their sales strategy.
Who sales agents are.
What sales agents do.
How the relationship with sales agents works.

Businesses That Sell Through Sales Agents

Businesses that sell their products and services through self-employed sales agents are known as principals. They are usually manufacturers, suppliers, or service providers, but they can be any type of business that has something to sell.

When principals want to sell their products and services through a sales agent this is called an opportunity. Principals with opportunities for sales agents can be businesses of any size. They can be small businesses, even self-employed one-person businesses, large nationwide companies, and international organisations that have local sales agents in many different countries.

So, as you can see, the range of principals is wide and varied, and the products and services they sell through sales agents are just as diverse. The opportunities advertised on our website include: B2B services, sales to retailers and wholesalers, B2C sales, fashion, finance, training courses, technology, logistics, lighting, gifts and houseware, textiles, industrial machinery, imports, DIY products, and industry specific sales. The list of products and services that can be successfully sold through sales agents is endless.

This means there is a a ready-made market for your services or products.

Your Requirements for Sales Agents

Below you will find a description of a traditional sales agent’s role and you can customise your search for sellers to meet your specific requirements.

You could be looking for a sales solution that meets the needs of your business that isn’t a traditional sales agent role. At Salesagents.uk we find sales partners for business principals looking for:

Traditional sales agents that sell predominantly face to face.
Consultants, online marketers, affiliates, telesales and online sellers.
Sales Agencies that look after sales nationally or to an agreed geographical area.
Businesses looking for product agency opportunities to complement their range.
Qualified lead generators that pass hot prospects to your in-house team to close.

You can choose the sales channels that you want agents to use to sell your sales offers. A traditional sales agent will sell through face-to-face meetings, the telephone, and online activities to support sales and arrange appointments. Your products and services may be suitable for selling by telesales, online marketing, or affiliate sales.

If you have a technical product or service, or customize each proposal, you may want agents to pass qualified leads to your business which are then followed-up by your experts. You would then pay commission on the leads that convert to sales. You can combine any of the above to tailor the role of the sales agents to your business requirements, and your advert with Salesagents.uk can be customised to find agents that meet your needs.

Sales Agents: Who Are They

When you advertise your opportunity with Salesagents.uk it will be seen by sellers actively working in the UK. We can also promote your opportunity to agents in other countries if you wish. The sales agents are usually self-employed and either independent individuals or working with other sales agents to form an agency.

Agents predominantly work on a commission only basis, which means they only get paid by principals when they make a sale. We’ll talk more on this in the next section. They pay for everything they need to carry out their day to day sales role: transport, phone, computer, etc. They take this additional cost into account when calculating the commission that they want to earn from principals. Another difference between an employed seller and a sales agent is, agents usually sell for more than one principal. They also have control over their sales actions rather than being managed by a principal.

We know how to promote your opportunity in a way that clearly presents the benefits agents are looking for when deciding which companies they want to work with. We use this experience when creating your advert and managing the search and promotion campaign to find agents.

What Do Sales Agents Do?

A typical sales agent sells products and services for principals. They work on a commission only basis and only receive rewards when they make a sale.

The agent gains an order from one of their customers and passes this order to the principal for it to be fulfilled. The principal pays an agreed amount of commission to the agent for the sale. Later we will discuss contracts between principals and agents and look at what constitutes a sale.

A clear difference between a self-employed sales agent and other sales channels is that sales agents don’t buy stock from you. A distributor or wholesaler may buy stock and then sell it on to end users at a profit, but a sales agent generates orders for your business to fulfill directly. The sales agreement is between you and the customer, not the agent and the customer.

The Relationship: Principals and Sales Agents

On the whole, sales agents and principals are looking for long term profitable relationships that will be a win-win for both parties.

A good way to start this relationship is to get everything agreed, and every eventuality covered, right at the start of the relationship. You let the agent know what you expect from this relationship and ask them what they want from it. Then get it all agreed in a contract.

A sales agent usually sells products and services from more than one principal. This is good, because as long as they are not already selling something in direct competition to what you sell, they will already have a network of existing customers and contacts ready and waiting to see your sales offers.

They gain the opportunity to offer what you sell to their customers.
You gain the opportunity to get what you sell in front of more customers.

Remember, this is a business relationship of equal partners, not an employee and boss situation. You want them to sell within your guidelines, and they want a reasonable reward for those sales. If you want to micro-manage the activity of a sales person, then you may want to advertise for an employed sales person.

Flexibility of the Relationship

One of the big positives about principal – agent relationships is the flexibility they offer.

You can design the opportunity specifically for your business needs and promote this opportunity to agents on the Salesagents.uk website. The opportunity should be attractive to your target agent type and offer commission rates and other benefits that motivates them to invest their resources in selling for you. The agreement must still be within legislation, which offers protection to both agents and principals.

Examples of different agent opportunities

We have principals that want agents to operate as account managers looking after sales from existing customers. Commission is paid on recurring sales and it benefits the agent to maintain and build relationships with the existing customer base, which is what the principal wants.

Some principals want to completely outsource their sales to an agent to leave them free to run their business. The agent may need additional agents that work with them in a sub-agent role and they manage the these sub-agents.

There are freelance agents selling via face to face, telephone, or online meetings. Appointment setting, referrals, introductions, online sales or affiliates driving traffic to a landing page, the options offer the perfect solutions to grow your sales.

Take a look at the range of opportunities from our current clients on the website on our Opportunities Page.

So, don’t worry if your needs are different to the standard sales agent model. As long as you can show that you’re offering a win-win relationship, and your agent sales partner can earn high rewards from it, you should get good responses from a sales opportunity promoted by Salesagents.uk.

Now you have an idea of how businesses and agents work together, let’s look at the potential benefits to you as a business principal when selling through sales agents.

2. Benefits of Including Agents in Your Sales Strategy

There are many benefits of selling your services and products through independent sales agents:

You only pay commission for sales, so it’s cost effective and there are no risks.
Many sales agents have existing customers and a network of contacts.
Agents can sell face to face, through telemarketing, emails, or online.
Agents have access to decision makers in your sector.
And, selling through agents leaves you free to focus on running your business.

In traditional sales models used by businesses with products and services to sell, the business would either employ a team of sales people to approach businesses or end-users or sell through established re-sellers, distributors, or wholesalers.

Now there is a third option, one that has many positive benefits over the old inflexible models. Using self-employed sales agents alongside, or instead of, traditional employed sales representatives is now a popular option for businesses to consider.

Below we look at different business types and give examples of where using commercial agents can boost sales growth and financial returns.

Why Sales Agents May be the Answer

Having a sales strategy that uses sales agents to sell in your target country could be the best way forward and here’s why:

Selling through sales agents will require some initial investment. Our services to find the best agents, training on your products and services, marketing support, and some additional support such as administration of the commission scheme. This cost will be a lot less than the costs associated with setting up an employed team on a salary.

Many sales agents will have an existing customer and contact network ready to present your sales offers to, so it is reasonable in most cases to expect those first sales to be generated faster than from a team of new employees that must start by cold calling and pipeline building before sales are made.

The best sales agents are self-motivated and organised. They manage their own time effectively and work well without supervision. If they don’t have these attributes, they won’t last long working on a commission only basis. This means they don’t require the same man-management time or supervisory structure that employed salaried sales people need.

What agents do need from you is a clear sales strategy: Pricing, the order process, defined target markets, how sales are fulfilled and timescales. Give them the tools and they will bring in the results.

UK SME’s Using Independent Sales Agents

Small to medium size businesses can grow UK sales by using self-employed sales agents to sell both products and services nationwide or to specific target areas.

Self-employed agents work on a commission only basis, so you only pay for sales closed. While the rate of commission will be much higher than that paid to an employed sales person, you don’t pay up front costs of a salary, company car, laptops, and mobile phones.

You only pay for results and up front costs are minimal, making selling through sales agents a low risk solution for many SMEs.

You may not need a full-time seller working for you. A sales agent will sell your products as well as those for several other non-competing businesses. A telesales agent will allocate a percentage of their time to make calls for you. It’s like sharing a resource, outsourcing your sales, and only paying for results.

Start-Ups – New Products – New Projects

You’ve started a business, invented a product, got a great new service for businesses, but you have no sales experience or limited resources for sales activity. You could employ a sales person, a sales team, or just hope enough people will respond to your website and marketing actions.

Or, you could outsource your sales to an agent or agents with experience in your customer sector and a ready-made audience for your sales offer. This can be a much quicker route to market than employing sales people who will need to cold call to build up a prospect base.

If you sell a service or product for businesses, B2B, there are sales agents already selling to businesses who will want to add what you provide to the sales offers they currently present.

If you are manufacturing or supplying a product to retailers, wholesalers, or online sellers, there are sales agents selling to those customers who are looking for new products to complement their ranges.

If your target market is domestic end-users, B2C, there are agents in our network community with years of experience selling all types of home improvements, financial services, home style and décor, and many more products and services to this market.

National Suppliers with Sales Needs in Remote Areas

In my career I’ve managed sales teams that covered the whole of the UK, and it was often difficult supporting and managing the activity of sales representatives based remotely from the office. These people often feel cut off and operate independently even though they are employed sales people. Including them as part of a sales team can have logistical problems. Travel to sales meetings and briefings can mean overnight stays, taking up valuable selling time. You might want to consider having the services of an independent agent in the areas that are remote from your operational centre.

Another situation where it can be beneficial to include sales agents in your sales strategy is for geographical areas with a low number of prospects. It is often not cost effective to have a salaried sales person covering an area with too few prospects or an area so large that they spend many hours in the car driving from one prospect to another. A sales agent can sell a wide range of products and services for different principals so it can be profitable for them to sell your products in those areas as the number of target prospects for their range of offers is greater.

I would recommend to sales organisations with national coverage, look at the option of using sales agents in some areas of the country. They need minimal support, they work independently, they don’t need to be involved in all company meetings, and they are highly self-motivated as they only get paid on results.

Online Businesses – Subscription Sites – Affiliate Marketing

A growing part of our business is helping online businesses find commission only agents, affiliates, and referrers. The Work at Home sector now offers some serious opportunities for people with online contacts and followers to earn commission by selling products or services, driving traffic to websites, and generating qualified leads.

Whether working from home or running a small business, these types of commission only partners can get your sales offers in front of 1,000s of people through their online presence, chats groups, and online marketing. And, just as with traditional sales agents, you as a business principal only pay for results.

Now you know the potential benefits of including sales agents in your sales strategy, let’s look at how to find the best agents for your opportunity.

3. Define Your Sales Agent Requirements

Once you’ve decided that you want sales agents to sell for your business, you will want to get your opportunity online using our campaign services and start getting responses from interested sales professionals with the skills and experience you are looking for.

My advice, stop right there and ask yourself a question. Do you know exactly what you want the agents to do for your business? Can you answer these basic questions:

What products or services will the agents sell?
Will your agents be covering set geographical areas?
Who are the target market customers for your sales?
Do you expect agents to need product training, onsite or remote?
Will you be offering any support, e.g. marketing, sales leads, website?

These are just the basics that you need to know, not just to start your search, but also to discuss the opportunity with the sales agents that respond and to form an agreement with the agents you select as sales partners.

In this section we will help you to answer all these questions and more, and be fully prepared to start an effective search for partners that targets the right sales agents for your opportunity.

Who Are the Customers Agents Will Be Targeting?

Will the agents be selling to any of your existing customers?

If you sell products that are one-off sales, and there are no repeat orders, then the above question isn’t needed. But if there are repeat orders for what you sell, for example consumables, do you want agents to deal with sales from your existing customers.

We recently advertised an opportunity for a self-employed sales agent to manage sales from only a company’s existing customers. This is unusual, it’s more of an account management role, but as I said in an earlier chapter, the sales agent option offers flexibility for your sales strategy.

Another consideration is when an agent acquires a new customer, do you want them to continue to sell to this new customer, or will that be done from your office. The answer to this question will have an impact on the agent’s commission payments and they will be expecting higher rewards if you require all new customers than for a role that includes repeat sales to existing customers.

A principal’s first reaction to some of the questions in this chapter can be that things are getting complicated, but the same questions would have to be addressed if you were hiring employed sales people. By considering these questions now you are gaining a proper understanding of your needs.

Who are your target market?

When principals are targeting the UK having sold their products in other countries, they will have a good idea who sales agents should be targeting to get the best results. But if you are a new business have you thought about who will buy your products or services, who you should target as potential customers?

If you manufacture a product, start by writing a list of people or businesses that will use what you make. Ask yourself, is it practical and most effective to sell directly to these end users?

If the answer’s yes, then the list is your target market.

If the answer’s no, then look at the next line up in the buying chain, e.g. wholesalers, retailers, etc.

Is it practical and profitable to sell to these businesses?

And keep going until you find a target market for your products.

If you provide a service B2B or B2C, it’s usually sold to the end users, and to identify this market you often need to look wider across sectors rather than up and down a buying chain. Obvious customers for your service will be easy to list, but are there others, related to your market, that you haven’t thought about?

Do You want Agents with Existing Customers?

To an agent, their existing customer contact list is valuable, it’s from this list that they make their living. It may have taken years to build and they only want to present relevant and beneficial products and services to the buyers on their list. The above section, on defining your target market will help you to give a clear description on your advert of the types of customers an agent should have on their list if responding to your opportunity.

When you have a clear understanding of who your customers are it will help you to select the best sales agents, selling in the right markets, with a relevant list of existing customers and contacts.

What products or Service Will Agents Sell for You?

Will sales agents be selling all the products or services you can supply to customers?

Maybe some of what you sell is better sold through other channels. Clearly state in your advert what the agents will be selling as they will look at your website and assume all the products will be included.

Geographical Sales Areas

Will your sales agents work in defined geographical sales areas?

This is a question you need to consider because there are alternatives to geographical sales areas, and one is not to have any area restrictions at all.

In my 25 years of managing sales teams nothing caused more arguments and cries of foul play than sales areas. It should be simple, each sales person is given a sales area and they can only sell in that area, but then comes the complications.

Someone sells to a branch of an organisation that also has branches in other sales areas. A sales person creeps across a boundary line to make a sale. One seller has an existing relationship with a prospect that is on someone else’s territory. A prospect gets invited across sales borders for a game of golf and signs the deal while on a different area than where the business resides. And I could give you many, many, more examples.

So before setting up sales areas, ask yourself if that’s the best way forward for your business. If it is, then define the areas and when you advertise with us for sales agents include in your advert the areas you want agents. If you want agents nationwide then state that in your advert and allocate the areas as you get responses to the advert.

Alternatives to Geographical Areas

If your product can be sold across many different markets, you might want to consider having agents from these different market sectors selling to their existing customers in their specialist sector.

For products or services that are a quick sale you might not need sales areas of any kind and leave it up to the agents to go out and sell. This can work well for sales offers where there are large numbers of prospects that will keep agents busy.

Effective Sales Areas

The location of sales agents must be taken into consideration when looking at sales areas. Although you are not paying them a salary for their time, or their travelling costs, if they are having to travel unreasonable distances or through traffic blackspots just to get to where they can sell the relationship may not last long.

Don’t Cause Yourself a Problem for Later

A mistake some principals make is to give their first sales agents huge geographical sales areas. The business grows and then the principal wants more sales agents. When the new sales agents start selling the huge areas of the original sales agents are cut down to make room for the new agents, and you then have very disgruntled sales agents threatening to end the relationship or take legal action.

Supporting Sales Agents

As a very general rule, there can be a correlation between the amount of sales support and the commission paid for sales. The more support you give to a sales agent the easier, and quicker, they can close sales, so they should sell more.

If you don’t give any support, and the agent is expected to action the complete sales process, from prospecting, cold calling and making appointments to presenting and closing the sale, then obviously this will take more work and a longer time span. It’s quite reasonable for a sales agent to expect commission in line with the effort, and any additional costs, it takes to gain a sale.

There is nothing wrong with advertising an opportunity where the sales agent is expected to generate sales with no support from the principal. In our experience at Salesagents.uk, the majority of principals want the agent to manage the complete sales cycle up to gaining an order. The reason we are including this topic is to make you aware of the options and to allow you to make the decision on whether to invest in support for agents such as lead generation.

There is a clear correlation between the support provided by a principal and the success of the sales agent.

Support You Could Give

The support a business can offer sales agents, and employed sales people, is mainly focused on the prospecting and appointment stages of the sales process.

Advertising to generate warm sales leads is the most obvious form of support. There are numerous marketing channels that can be used and some, such as social and business media, have costs which are minimal but do require staff time to manage and keep up to date.

Buying high quality prospect lists for the relevant market sectors, which show decision makers and up to date contact details, can be a help to sales people looking for new prospects.

One of the most time-consuming actions for field sales people is making cold calls for sales appointments. If you support your sales function by getting good appointments made for them, they will spend more time in front of customers making sales. We can also find freelance appointment setters for you to support your sales agents.

Customers expect businesses to have a website. They often judge a business trying to sell to them by the quality of their website. A good, up to date, website that looks professional will really help your sales people. A poor website, with out of date content, or that looks amateur, will work against your sales people. A poor website, in my opinion, is worse than no website.

If you will be supporting sales by any of the above methods, or in other ways we haven’t covered, make sure you include this when you advertise your opportunity. It will help you to attract the best sales agents and get responses to your advert. When you enter he information for your advert to find agents, you will see a list of potential agent benefits with suggestions to help you.

Sales Proposals and Closing Support

Your product or service could be technical, complex, or customised for each individual prospect. This doesn’t mean you can’t use sales agents in your business strategy. Where the sales process requires technical or expert knowledge that sales agents may not have, and where a sales proposal needs to be written by a person with this knowledge, there are solutions to increase sales that include working with agents.

Some business principals work with sales partners that acquire qualified sales leads and pass these to the business. The business in-house team may then write a customised proposal which the agent goes back to the customer with and closes the sale. In some agent’s sales processes the in-house team close the sale without any assistance from the agent. The agent is only paid for qualified prospects that convert o paying customers.

As was said earlier, the amount of work a sales agent has to do is reflected in the commission payable for a sale. An agent expects to earn less for a lead being passed that is converted in-house than for a sale they close.

Training for Sales Agents

When a principal offers product training for sale agents they should include it in the opportunity advert. It shows commitment from the start and helps to build a relationship.

Will sales agents need training before they can effectively sell your products or services?

If they will, have you considered how you will provide the training. It may come up in the conversations you have with agents that respond to your advert, so it’s best to be prepared.

Will agents need to be trained at your office, or can it be done online, or by other means. If they need to travel, or stay overnight, it’s my opinion that the principal should cover the cost of this.

Now You Know What You Want

I hope the above questions and information have led to you fully understanding what your sales agent requirements are, and how agents will operate when selling for you.

You should now have a list of information to include in your advert for your sales agent opportunity, or to pass to us at Salesagent.uk to write the advert for you. You will also have enough information to confidently discuss your requirements with the agents that respond to your advert. This is important as those first conversations will be the start of your relationship with the agents.

Sales Agent Prospectus

Some of our clients have a prospectus ready to send to the sales agents that respond to their advertised sales opportunity. It doesn’t need to be long or complex. A brief summary of the sales agent role, how the sales partnership will work, and many of the topics we have discussed here will suffice. You can keep it simple, a Word document saved as a pdf. This prepared response to the agents will give a great first impression of you and your business. You can include the benefits your sales opportunity offers to agents. The size of the potential market, your commission scheme, and if you have existing sales people, an idea of the sales results they are achieving to show what is possible.

Respond Quickly to Agents

A quick response to the agents that contact you is essential. Even if it is just an acknowledgement of their interest with a message to say you have received their information. Include the expected time-scale for the next step. One of the main criticisms we hear in feedback from agents that have applied for an opportunity is; no response within a reasonable time.

Now you know what you want we can move to the next step and get your sales agent opportunity advert online and promoted to get it in front of as many agents as possible.

See the next section and follow the step by step instructions to get your opportunity advert published online the next working day.

4. How to Find Sales Agents

In this section we give you a step-by-step guide on how to get your sales opportunity in front of the best professional sales agents for your sales offers.

If you’ve read the previous section you have a clear understanding of your sales agent requirements and that will help you now as we place your advert.

It’s a good idea to have open the page on the Salesagents.uk website where you start your search for sales agents and I’ll talk you through the few steps to get started. Open the page Find Sales Agents.

How to Find Salesagents

Scroll down to the section on the page that presents the 4 services we offer and the table below that shows what is included in each package. You select the service you want by clicking the Get Started button.

You can see clear pricing for each of the services. There are no hidden fees or additional costs no matter how many agents apply for your opportunity.

Here’s what’s included in each service:

The Free Listing Option

With the Free Listing you are relying on the general promotion of the Opportunities page that we do through our online presence to bring agents to the page, and then hoping they will click through to your individual advert. The results are very limited compared to our professional services because our paid services include features to promote your individual opportunity to agents.

The Standard Service

Your sales agent opportunity advert will be written by professional copywriters based on the information you provide as part of the order process.

Your promotion campaign is targeted and managed and the aim is to drive potential agents directly to your full-page advert where those that meet your criteria will contact you. We will promote your agent opportunity to our community network using our social and business media presence, newsletters, and discussions in industry sector closed groups and sales groups that we manage.

We are in constant contact with our network community of 1.000s of sales agents who are all actively looking for new products and services to sell. The content of the posts, discussions, and comments is changed regularly and kept fresh throughout the campaign. You are free to give us feedback on the numbers and quality of responses you receive, and we will adapt our approach and take different angles to improve the performance of the service.

The Premium Service

With the Premium service you get all the benefits of the Standard service above: promotion on social and business media, newsletters, and discussions in groups, plus: Our team of Head Hunters call and email suitable sales agents to discuss your individual opportunity. This is the most effective way to find the best sales agents and will greatly increase the number of applications you receive.

You also get a paid advertising campaign online. This additional benefit means your opportunity will reach sales agents outside of our community network and drive even more agents to your full-page advert on our website.

Your advert will be placed in a premium position constantly near the top of the Opportunities page, so it is seen first by visitors. And, your opportunity will be sent out to agents in an individual email shot. The Premium service gets you the most responses, it’s perfect for niche market sales and serious principals looking for more than one agent.

The Platinum Service

Includes all the benefits of the Premium service above plus, we save you time by managing your applications.

A dedicated Account Manager gives you superior customer service, a single point of contact, and assistance when required.

Your account manager will screen your applications, so you only receive information on agents that match the profile you want. They will contact the screened applicants and complete an agent profile to give you comprehensive information on their experience and current sales activity.

See full details on the services we offer at: Find Sales Agents

Start Your Search for Sales Agents

Now you have selected which of the services you want to use, you can quickly order the service. Simply click the Get Started button for the service you want and follow the online process. You will set up your login for the site, make the payment, and enter the information for your advert.

Your advert will be published the next working day and you will be given the opportunity to make any required changes. The promotion campaign will commence and you will receive the responses from interested agents with an email notification. Responses come directly to you as we think you are the best person to decide on which sales agents are best for your business.

You can easily edit your ad text at any time from your client dashboard.

Getting High Numbers of Good Quality Response

Sales agents visiting our website and receiving promoted adverts from us make decisions on whether they want to add your products and services to their sales offers. Sometimes an advertisement is not successful simply because agents don’t see the products or services as a valuable addition to their sales list. That’s why it is important to include the benefits a sales agent can gain from your opportunity. You have to sell the opportunity to the agents. Our team and copywriters will help you do that.

The great majority of advertisements are successful, and they get good responses from agents. In the next section we look at what to do when you get these responses with tips on how to select sales agents to work with you and your business.

5. Selecting Sales Agents

Although we’ve titled this section, Selecting Sales Agents, it has to be remembered that it’s a two-way process and as you are selecting the best sales agents from the responses you get to your advert, they are also deciding whether they want to form a relationship with your business and sell your products.

Let’s start with you and some tips on selecting sales agents.

Matching Your Requirements

Back in chapter 3 you created a list of your requirements and how you will work with sales agents. You used this list to help you to place your advert. Now you can use the same list to see if the agents that respond to your advert meet your requirements.

The selection process is similar to the one you would use when hiring an employee. You have a job description, and a list of attributes, skills, and experience that the applicants should have. These can be separated into two categories, essential and preferred.

When a sales agent contacts you it will quickly become apparent whether they meet your essential requirements. The agents that do meet your requirements can then be considered by further analysis of their experience, skills, and attributes, until you have a shortlist of the most suitable.

We ask that you respond to all sales agents quickly, even if it’s a brief acknowledgement of receipt of their message. Tell them what the next step is and give them a timeframe. This maintains the quality and professionalism of the website, lets the agents know you have received their application, and gives a good impression of your business.

The Final Selection

We would advise that you meet with an agent before entering into an agreement with them. If that’s not possible, today’s technology offers online meeting facilities using Skype or other services.

When you get to the point where you are considering an agent, or a shortlist of agents, to enter into a relationship with, it is always a good idea to go back to your list of requirements and have one last check on how well they meet your criteria. When you created that list every item was added for a reason, it was something you wanted an agent to have or be able to do. During the selection process, principals can sometimes lose sight of their original needs and wants from an agent and get swayed by a well written CV, or a charismatic interview.

The Requirements of the Agent

The further into the selection process you get the more it can become a negotiation, and that can be a good thing. It’s better to discover what the sales agent wants early in the selection process rather than right at the end and just before you enter into an agreement.

We’ve put together some points you might want to discuss and keep in mind when you talk with potential agents. These tips are from both perspectives, the principal and the agent.

Tips and Points for Discussion

Through Salesagents.uk we have personally spoken with hundreds, possibly thousands, of independent agents who make their living by representing and selling for different principals.

What characterises most sales agents is, they are fearless sales professionals and entrepreneurs. Many agents impress us tremendously and we have, through countless dialogues with agents, formed a good picture of what they look for when considering agencies. We would like to share with you 5 areas you should consider when you have a dialogue with a potential agent.

Commission & Terms

How much commission to pay is so important to both principals and agents that we’ve given it a section of its own immediately after this one. To an independent agent without a regular base salary and associated benefits, commission and terms will naturally be very important. The details of the commission scheme can be included in your opportunity advert on our website or discussed at the meeting stage.

Make sure you can clearly explain what a sales agent will be paid for, when they will be paid, and the full terms of the commission payment. Before your discussions with a potential agent, know what your red lines are. This is a negotiation, so know what you will negotiate up to, and where you will stop.

Include in the meeting what costs, if any, you will cover: training, travelling to your office, trade shows, or sales meetings outside of the agent’s district.

Sales History and USP’s

How will you, as a principal, show evidence to a sales agent of expected sales results and commission?

Do you have sales agents already, and if so, how do they perform? If you don’t have sales agents, can the company show sales results from hired employees? These are perfectly legitimate questions that you should expect from sales agents. It’s a business deal and they want to know the potential returns.

If you have a well-established company, you can probably demonstrate existing sales results that can give an agent confidence that your products/services are something that sells in the market.

For a relatively new company it is difficult to evidence or forecast sales results. In this case think about what you can do to give a new sales agent confidence in your business and products. No sales agent wants to spend their time testing the market at their costs.

Does the product have Unique Selling Points in comparison to competing products? If the unique selling points are strong enough, they could offset the lack of documented sales results.

Exclusivity

Some agents can be very demanding when it comes to exclusivity of their sales area.

If they take over an existing client portfolio it obviously has a value from day one. But if the market is completely new, and there are no existing customers in the area, it is debatable how much the exclusivity of the sales area will be important in the initial phase.

If they require exclusivity from the beginning, you may want to have a clause in the agreement stating that they need to achieve a certain level of sales or they lose that exclusivity. So, if they do not achieve the sales budget the exclusivity is worth nothing. And if they achieve the budget, they have sufficiently strong cards to play to get exclusivity anyway, and you will have little reason to look for other agents in the area.

An alternative is that exclusivity is given after a trial period if the agent delivers specific revenue targets. This is a good solution for both parties and can be a better option than to agree exclusivity from day one.

There are also principals that do not provide exclusivity and they have professional sales agents who are just fine without it. As long as the conditions and terms are identical for the agents it can be argued that they should focus on building their client base and not be too fearful of a couple of competitors.

Exclusivity is often more meaningful in a small targeted market niche. There is not room for many agents selling special components for nuclear power plants in the UK, but there is room for a lot of agents that sell products to SMEs or retailers.

If you agree exclusivity and agency rights in an area, be careful to ensure that the contract is entirely clear on what it entails. We have come across some concrete examples where agents have contractual exclusivity in their area, but then later discovered that retailers still get to buy goods directly from the principal. One possible excuse from the principal’s side will be that the retailer is part of a chain and the sale technically was made somewhere else, such as their main office, even if the goods are sold in the agent’s area.

The Principal’s Finances and Business Ethics

If a principal is on the verge of bankruptcy it is not a company that a sales agent will want to start working with. Expect agents to do some research into the financial situation of your company before entering into a business relationship.

Agents will also look for evidence of company reliability and customer reviews and feedback. Even companies with net profits are not always ethical. Do you have authentic testimonials from clients and other agents?

Sales Material and Support

Agents will ask how you will help them to succeed?

We discussed support in section 3 and during the selection process it’s good to show what you will do to support the actions of the agent. The principals that are truly interested in succeeding with sales agents work with agents and support them to produce results.

Some companies that have advertised via Salesagents.uk are also working actively to find specific customer leads to give to their agents. It is no coincidence that these also are the companies that experience tremendous success with their network of agents, and sales agents thrive working on their behalf. You can see more on lead generation on the website.

6. How Much Commission Should I Pay?

One of the most common questions we get from principals is, how much commission should I pay to agents? Our answer is always “as much as possible” or “what your margins permit.”

It goes without saying that agents who sell on commission should have the opportunity to earn more than ordinary employees. Remember, they cover many of the costs that a business would cover for an employed seller. However, it is absolutely impossible to give a specific commission rate as it is entirely dependent on product, industry, margins, expected sales, and the market.

Commission payments are usually paid as a percentage of the revenue value of the products or services being sold by the agent, but this can be flexible if there is a more appropriate measure. The amount of commission paid to an agent for each sale is negotiated between the agent and the business at the start of the relationship.

As with employed positions, the value of commission payments can be dependent upon the margins that the company make, the financial value of the product or service being sold, and the timescales of the sales cycle or order fulfilment. As a guide, sales agent’s commission in general ranges between 5% and 30% of the revenue value of the product or service being sold.

Low value and quick turnover products will be at the lower end of the commission percentage range because the sales agent is expected to sell more of the low value items in a shorter period of time. Higher value items or services with greater profit margins and a long sales negotiation period will be at the high end of the range, for example technical products made to customised specifications.

If a sales agent earns regular commission from repeat orders placed by the new customers they have introduced to the company, then the commission payments are usually lower than when selling a one-off product, as there is more work required when making the first sale to a new customer.

The amount of work the agent has to do to earn commission will impact the commission percentage. A sales agent passing over a qualified lead, which the business then converts to a sale, may be paid a lower amount than an agent who must close the sale and get the signed order with all relevant information.

7. The Contract

Most relationships between principals and sales agents run smoothly and are very successful for both parties. But if things go wrong those agreements made with just a hand shake don’t mean anything.

In any long-term relationship there can be problems, and the principal – agent relationship is no different. Some problems are caused by one person having a different understanding of something that was agreed. Others come about when there is a change, implemented by the agent or principal, or a change outside of your control for example in the market, or caused

by your customers or competitors.

The best way to avoid problems is to have everything written down and signed at the start of your relationship in the form of a contract.

Purpose of a Contract

A contract is a written document, signed by both parties, that states the terms and conditions of how you will work together, and what happens if you part company.

Its purpose is to be a reference point for any disagreements on any part of the agent – principal relationship and roles, so it makes sense to get every eventuality into the contract:

Is there sales support being given by the principal?
How can the relationship be terminated by either party?
Are there minimum sales performance levels that must be achieved?
Have you offered an exclusive sales area, are there conditions relating to sales?
How about the other products and services the agents sell, are they competing with yours?

For some of the above questions, and other areas of the business relationship, there is legislation in the UK and EU that must be taken into account, that’s one of the reasons we recommend getting qualified legal advice on sales agent contracts.

You wouldn’t take on an employee without a contract, even if it wasn’t a legal requirement, so why would you get into a relationship with sales agents without having a proper contract in place. We always recommend that principals and agents have an agreed contract for their relationship, and we advise getting one drawn up by a qualified legal advisor. Yes, there is a cost involved, but if problems do arise the cost will be a good investment, think of it as an insurance policy.

There may be points relating to your business and its processes that are unique to you and that you will want to include in the contract. One of the most important points is discussed next.

What is a Sale?

What is a sale?

It sounds like a simple question that’s easy to answer, but a sale can be something different to each principal and it should be clearly defined so agents know exactly what they have to do to qualify for a commission payment.

Here are some examples to get you thinking about what your definition of a sale should be:

If you go into a shop and buy a product, the sale is usually said to be made when you pay the shop assistant for the purchase. But what about a sales agent selling to the shopkeeper, when is their sale made and when can they claim commission?

Will you be paying your sales agent commission when they bring you a signed order? This is done in some businesses and works well until an order is delivered but not paid for or cancelled by the buyer. Then the principal may try to claw back the commission from the agent, but this process must be discussed and agreed and ideally be included in the contract.

Some businesses define a sale as being when the order is paid for, or when it is delivered, or when provision of service commences. Sales people used to collect cheques from customers as they ordered, but this is rare nowadays. For repeat sales, or when selling a service, commission sometimes commences after the first fulfillment.

Think about how you define a sale for your business and when you will pay commission, and make sure you have an agreement signed by you and the agent. The ideal sales and commission scheme will be fair to both sides and encourage profitable sales and long-term success.

Disclaimer: Salesagents.uk does not offer legal advice. We recommend all agents and principals obtain qualified legal advice when entering into a business relationship.

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