Advantages and Disadvantages of Independent Reps and franchising
Advantages and Disadvantages of Independent Reps
Advantages
No sales force maintenance expenses. The travel expenses of a salesperson can be as high as his or her salary. Even phone expenses can be staggering. Therefore, the most obvious advantage to employing independent sales representatives to sell your products or services is that you won't be incurring the expense of maintaining a sales force. There are, however, other advantages that are just as compelling.
Longevity
A well-established representative will be around forever. They aren't likely to disappear after a few hard months on the road, like so many entry-level salespeople do.
Experience
Independent sales representatives tend to be experienced and successful. They also tend to net better sales results than a in-house sales force might. Why? Because they usually have long and successful career backgrounds that include sales experience with large, national firms.
Less management time
Independent sales representatives are usually more experienced than in-house representatives and need less management and direction. If you hire them, you will be less likely to need to hire a sales manager, and they will probably take much less of your time than in-house representatives.
Sales expenses rise and fall with your sales
This is a big plus for a growing business that doesn't have lots of cash in its early days, and also helps during downturns.
Disadvantages
No control
You can't control an independent representative. They will only push those products they feel have the best chance of selling and making them money. They will tend to put their best effort into selling the best products from their most established lines.
No commitment
As a new manufacturer you are an easy target for the "first time out of the bag syndrome." The representative will be looking to place orders for your product very quickly after he or she first introduces it. If that doesn't happen, your product might
Advantages
No sales force maintenance expenses. The travel expenses of a salesperson can be as high as his or her salary. Even phone expenses can be staggering. Therefore, the most obvious advantage to employing independent sales representatives to sell your products or services is that you won't be incurring the expense of maintaining a sales force. There are, however, other advantages that are just as compelling.
Longevity
A well-established representative will be around forever. They aren't likely to disappear after a few hard months on the road, like so many entry-level salespeople do.
Experience
Independent sales representatives tend to be experienced and successful. They also tend to net better sales results than a in-house sales force might. Why? Because they usually have long and successful career backgrounds that include sales experience with large, national firms.
Less management time
Independent sales representatives are usually more experienced than in-house representatives and need less management and direction. If you hire them, you will be less likely to need to hire a sales manager, and they will probably take much less of your time than in-house representatives.
Sales expenses rise and fall with your sales
This is a big plus for a growing business that doesn't have lots of cash in its early days, and also helps during downturns.
Disadvantages
No control
You can't control an independent representative. They will only push those products they feel have the best chance of selling and making them money. They will tend to put their best effort into selling the best products from their most established lines.
No commitment
As a new manufacturer you are an easy target for the "first time out of the bag syndrome." The representative will be looking to place orders for your product very quickly after he or she first introduces it. If that doesn't happen, your product might