So a guy calls me up this week and asks me to help him sell his new line of wood parts to cabinet shops. We talked and determined that this line of parts was being used by most shops and that if we could convince the shops to outsource them instead of make them, they could sell well.
Then it got ugly. I asked how much business he was currently doing in my territory. He said âZero.â I asked how many leads he had in my territory. âZero,â he replied. How many brochures did he have? âZero.â How many trade shows did he attend? âZero.â And lastly, I asked how much he was willing to chip in to help me with the initial costs of email blasts, sales brochure printing, gas, hotels, food, samples, stamps, customer lunches and my time. You guessed it. âZero.â
He was a little miffed at my questions. He assumed that since I was going to these accounts anyway, that I could mention his product and sell it with the expectation of future commissions. That makes sense if you have never sold anything, but that's not my problem.
Sales force.com recently noted that the cost of each successful physical sales call is $400. Each salesperson must often make several phone, send emails, and conduct physical calls on a prospect before turning him into a customer. People like me that are independent reps carry several lines and try to combine those lines into one sales call to save on the cost and customerâs time. What our wood part friend did not understand was that the current lines we have are already paying us to make that call. âMentioningâ his line takes time away from our paying vendors, and actually costs us lost revenue from our current trusted suppliers. We have a limited amount of time in front of a customer and that time is allocated to those people willing to help cover the costs of selling. We risk our reputation and the loss of our customersâ trust selling untried new products. If he was unwilling to help with the cost of selling, we were not willing to jeopardize the possible loss of our revenue from other lines.
The lesson here is that if you want to build your business with independent or factory sales reps, you will have to help cover their costs. That help can come from existing customers you turn over to the rep, or from a shared marketing fee that covers the initial cash outlay. Either way, budget something for sales in every new territory or product line you want to expand.
Rick Hill is a consultant specializing in woodworking companies that need to find new markets and more sales. He is also an independent sales rep and founder of WoodReps.Com, a national association of independent reps in the woodworking industry. He can be reached through his website OnPointSales.com.
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