Welcome to our newest series on Sales Representatives. This series will cover a basic overview on what sales reps are and aren’t, the pros and cons of working with sales reps, how to know if you’re ready for a sales rep, where to find reps and tips for a creating great working relationship. So stay tuned as we roll these posts out over the next couple of weeks. Today we’ll briefly cover Sales Reps 101.
Sales representatives are individuals whom either work for themselves as independent reps or are employed by a larger representative group. Their job is to present the product lines they represent to retail buyers and collect orders. They may work out of their homes and travel to stores in their territory or they may work in a permanent showroom, such as America’s Mart in Atlanta, GA where buyers come to them to review products that are available for wholesale purchase.
A sales rep is an independent contractor, not an employee. A rep and a manufacturer sign an agreement that clearly defines the parameters of the working relationship, including the territory (city, state or region) where the rep will work, the commission level and payment terms. The rep is responsible for presenting products to stores and working to secure an order. After the order is placed and filled, the rep continues building the relationship with the buyer in order to resolve any issues, provide customer service and encourage additional orders in the future.
Sales reps work on commission based off of the order totals that they collect. An average commission rate for our industry is 15%. So if a rep gains a new wholesale account that orders for $300.00 of your soaps and lotions, the reps’ commission on that order would be $45.00. The rep will earn a commission off of every order that the store places as long as the contract between you and the rep has not been terminated.
This has been a brief overview on sales representatives, and we’ll dive much deeper into if working with a rep is right for you and your business and if you decide it is, how to find a quality sales rep for your brand. In the meantime, what questions do you have about working with a sales rep? Post in the comments below and I’ll do my best to answer your questions in a future post in this series.