Many startups and small businesses think that using independent sales agents are a simple and effective solution, but that is not always so.

1. Selling via Independent Sales
Agents
A good solution for Startups and
Small Businesses?
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2. The Purpose of a Business is to Create a
Customer – Peter Drucker
Many great products and services fail because they do not have
customers. It is probably the biggest single reason for failure.
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3. “Build a Better Mousetrap and the World will beat
a Path to your Door! NOT!
• Customers are satisfied with what they have – they have learned how
to make the best of it
• Customers have relationships or contracts with existing suppliers
• Customers know that change can be disruptive
• Absolute cost may be more important than quality or value
• Many other businesses are trying to sell to the same customer you
are, so prospects are overwhelmed
• There may be a slow and cumbersome purchasing process in place
• They may not believe what you say, even if you get to talk to them
• Selling and marketing are essential
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4. Selling is expensive. How do I save money?
• Small companies cannot afford really skilled sales people
• Most sales people are mere order takers rather than new business
developers
• So, using an independent sales agent, whether a broker
(compensated by commission) or distributor (takes ownership of the
good) is one apparently obvious solution
• However, it is complex and far from easy
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5. Issues with Independent Sales Agents
• They are independent business people who do not report to you
• Their relationships with customers are long term and enduring,
whereas their relationship with you may be transient. Their loyalty is
to that relationship, which they will not risk.
• You may be a small part of their revenue, so they will not risk other
revenue for you
• If you get to be a large part of their revenue, they will feel vulnerable
and use the money they make from you, to build other clients
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6. At each end, the Sales Agent reduces efforts
Effort given
by sales
agent
0% of Agent’s
Revenue
100% of Agent’s
revenue
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7. You know your product far better than any
agent.
• They do not know the product as well as you do
• They do not have passion for the product or service
• They can make introductions for you
• They are often good at taking repeat orders and routine servicing of
the customer
• They will be less likely to push or rock the boat than the business’s
own management.
• Business owners and executives have to take responsibility for initial
sales, with the agent acting as support.
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8. How to use Independent Sales Agents
• Companies that succeed with Independent Sales Agents:
• Manage the Sales Agents closely – training, setting goals, incentive
compensation, etc
• Major Sales Calls are led by Company executives, often assigned
Sales Managers as the company becomes larger
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9. Summary
• It is essential to have a product that meets current or potential needs
of the identified target market.
• The Pricing has to be in accord with Perceived Value
• The Marketing message has to be meaningful, relevant, and
differentiated
• There has to be evidence to support claims: test results; customer
references; reviews; proof of concept test process offered
• But reaching to prospects, and convincing them to try and buy, is the
responsibility of the executives of the company.
• Teach yourself to sell: see books listed in the Appendix
(C) 2021 Max Brand Equity, Inc.