As a sales manager for a small business, I was constantly looking at ways to improve our domestic and international sales. One avenue that always proved lucrative to sell product through, was that of the independent agents and distributors. These independent agencies are located throughout the world and serve as your eyes and ears to developing new customers. Working in a small business setting, I had limited funds and only had a sales team of two other sales engineers. While there was physically no way for the three of us to cover the world selling direct, we were able to do a very efficient and profitable job working with our 18 domestic and 42 international independent agents and distributors. Looking at some bigger numbers, between my two sales engineers and 60 agencies working for us, I had approximately 240 people selling product for the company.
Throughout this short series of articles, we are going to be talking a lot about these independent agents and distributors. I think it is imperative for any new, small or mid sized company to look at this sales method as a viable option to get product to the market in an efficient manner I want to talk about the roles agents have as a sales channel, finding and interviewing, training and motivating, the internet impact on these channels and how to manage and grow a relationship with the agent.
There are a number of names I have seen used to talk about the agents, some of these include manufacturers representative, distributor, independent agent or the middleman, for simplicity in these articles I am going to refer to this group of individuals as the Agent. The second group of individuals I will be referencing is that of the manufacturers or service providers who are selling their products through the agents, these individuals are commonly referred to as the principals.
Before we get into identifying, managing or motivating our agents, I think it is important to understand why a company needs an agent. The bottom line, is that a principal has a product and needs to get it to the market in a very efficient way. Without getting the product into the hands of the customer, the principal is not going to make any money. Another neat thing about the agents, is that you can often find an agent for all different types of products, I have never heard the complaint that there are no distributors for my product. There are agents that sell sporting goods, household items, adult novelties, construction equipment, capital equipment and just about anything else imaginable. It is important to remember that agents have proven time and time again to be an important component in the sales channel of many small and mid sized companies, this is due to the relatively inexpensive way to market your products through them.
You are probably sitting there and asking yourself, why would an agent, who is already selling products and doing good for themselves want to sell my product as well? Like anybody else, agents are in business for the same thing, to make money. They are constantly on the look out to sell other complimentary products that will make them more money. These agents typically build up a number of complimentary products that they use to cater to a specific niche of industries often in a designated territory. They take care of local promotions, advertising, and the attendance of trade shows on behalf of their principals; income is generated by earning a commission often a percentage of the product on every sale into their territory.
I have read some journal articles that talk about how the agent is a dying profession and with the rise of the internet, they will soon disappear. Nobody can deny that on the internet is a wealth of information, you can find just about anything on it. Unfortunately with technology today, it is just impossible for the internet to be knocking on doors, making cold calls, and visiting face to face with customers. This is where the true value of your agents comes into play.
So now that you have a basic understanding of what an agent is, why we need them and how they operate, lets look ahead and see what the next step is. In the next article, we will discuss the different types of agents that exist around the world. I also want to get into some of the territory differentiations used when signing agents up and what to look for when searching for a quality agent.
For questions or comments, please email the author.
Ben Barker, M. B. A. , founder of The Barker Marketing Group currently consults new, small and mid sized companies on sales management topics using his proven results method of sales channel distribution.
For more information, please visit http://www.barkermg.com