Thursday, September 27, 2007

Hiring your first reps

You have developed a great product. Now how do you get it into the hands of consumers? I believe your distribution strategy can make or break a company’s success. Familiar with Robeez early sales model, Sharon sent me this email:

I am really intrigued by the model of your early sales force – that is moms and grandmas who were enthusiastic to introduce Robeez to their local markets. I am finding myself now in the position to look for a sales rep for our products. I have talked to sales reps that represent many lines, and I'm also talking to a mom who is very enthusiastic, and in a good position to introduce our products to Alberta, Saskatchewan, and Manitoba.

When you hired your "mom sales reps", did you pay them the same commission as multi-line sales reps (I think it's 10-15%)? Since they represent only your line, are they considered your employee or self-employed? Did you cover any expenses, such as travel, business cards, samples, etc? Were they allowed exclusivity in their areas, and if so, what conditions did they have to meet, such as sales volumes, or number of stores? And at what point do you terminate a sales rep - aside from obvious reasons such as non-performance, what happens if their market becomes saturated and they can no longer achieve their sales goals? If I had someone work hard for me for, say 5 years and helped me get to where I wanted, but now there's no new stores I wish to be in and sales volumes are at a plateau, and they don't want to leave, I don't know if I could have the heart to let someone go! Did you restructure their position within the company?

It looks like this model of sales reps worked for you when you were getting established. What were the drawbacks of this model, and what would your advice be for anyone wishing to follow?

The benefits of hiring moms to represent your baby products are obvious. They can speak genuinely about the benefits of your product from first-hand experience. The benefits of hiring established sales reps are their experience and existing contacts with retailers. Finding someone with both can be difficult. From my experience, I found moms to be the better route. Although they may not have sales experience, they make up for a lot just with enthusiasm. Multi-line reps often have a large number of products and are not able to focus a great deal of their energies on developing distribution. Here’s how we built our sales team at Robeez:

  • Commission – At Robeez, all reps earned the same commission, whether mom or multi-line.
  • Employment – Reps were self-employed, rather than hired employees.
    Expenses – Reps covered their own expenses associated with selling Robeez, however samples, print materials, and business cards were provided.
  • Exclusivity – When my first rep started with Robeez, her territory was “unofficially” North America. As time went on, we needed more reps to service the number of accounts and territories were broken down. The territory size then needed to be manageable and financially viable for the rep.
  • Termination – Along the way, I did have to let reps go who were not performing. One misconception I want to clarify: just because a territory is saturated with retail accounts, does not mean that the rep is no longer useful. Good reps call on accounts regularly to present new collections, merchandise displays, and suggest tips or tools for increasing sales in-store. They have a relationship with the store that goes well beyond getting the first order.

My advice for you as you hire your first sales rep: don’t rush. Take your time to find the right person for your line. I believe that when you meet the right person, everything will just click. Happy hiring!

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1 comment:

RuffleButts said...

Thank you so much for taking the time to share your advice and experience. I came across your blog as a referral and I love it! As an entrepreneur and designer of children's apparel, it is so refreshing to find someone supportive of other entrepreneurs and willing to share their experience. Keep up the great work!

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