The Independent Sales Rep

Rep Agreements And Contracts Part Two

2011-10-05T13:54:00.000-07:00

In the last post we saw what a typical “Rep-Vendor Agreement Letter” looks like. It was an informal looking document outlaying what the vendor expected out of a rep, and allowed the rep to add anything he or she saw fit that would establish what was expected out of the vendor if it weren’t already stated. But, an Agreement Letter can be perfectly legal.

There are also instances where a vendor writes a more formal looking legal contract. What this post will contain is an example of one of those documents. As in the last post, I’ve added notes in bold italics for explanatory purposes.
__________________________________________________________________________________
STANDARD INDEPENDENT CONTRACTOR SALES REPRESENTATIVE AGREEMENT
(Notes will be made in Bold Italics)
This agreement, made this ___ day of __________, 20___, by and between ______________________ of ____________________, hereinafter called the Company, and ___________________ of ________________________, hereinafter called the Salesperson. WITNESSETH:
1. The Company engages the Salesperson, and the Salesperson agrees to act as Salesperson for the Company, starting from the date hereof, and this agreement shall be automatically renewed from year to year with the same terms and provisions, unless this agreement shall be terminated sooner in the manner hereinafter provided.
2. (a) The Company agrees to pay the Salesperson as compensation for his services a commission of ___ per cent (___%) on the gross/net (scratch one) amount of sales made, shipped and/or distributed into the Salesperson's territory, consisting of the following states, in which Salesperson shall have exclusive territorial rights (accounts that are exceptions listed below): ______________________________________________________________________ ______________________________________________________________________________________________________________
(b) The Salesperson shall not be charged with or be liable for any advertising allowance granted by the Company, nor shall there be any decrease or reduction of commission on nationally advertised merchandise, close-outs, promotional goods or for any other cause, unless same shall first be consented to in writing by the Salesperson.
(c) The Salesperson will not make any representations, warranties or commitments binding the Company without the prior written consent of the Company.
(d) The Company agrees to refer to the Salesperson for attention all inquiries concerning its products received by the Company from any source or by any means whatsoever from the above described territory.(This is not always a condition with many Company/Rep relationships.)
(e) The Company agrees to give Salesperson credit for all goods shipped to or in Salesperson's territory, or sales made to customers therein, whether the orders for such sales are sent by Salesperson, received by the Company through the mails, or via facsimile, or via electronic mail, or taken at the Company's place of business, or placed by national buying offices, or otherwise. (Not always a condition either.)
3. (a) The Company shall have the option of accepting or rejecting any order or orders taken by the Salesperson, and no commissions shall be payable hereunder except on goods actually shipped by the Company and received and accepted by the Purchaser, provided, however, that the Company guarantees to pay the Salesperson commissions on a minimum of eighty-five per cent (85%) of accepted orders, whether shipped or not. An order will be considered accepted unless the Company notifies the Salesperson in writing of any order or orders rejected within ___ days of the mailing of such order or orders by the Salesperson. The Company guarantees to ship a minimum of 85% of accepted order or orders prior to the end of the delivery date specified on said order or orders.(Not always a condition, but any company that can claim such service is one any rep would want to work with.)
(b) In the event written notice of rejection is not given the Salesperson within the time above provided, the Salesperson shall become entitled to commissions on said eighty-five per cent (85%) of all non-rejected orders, which commissions shall be paid on the 15th day of the month following the day of the season for which said order or orders were received by the Company. (See note following (a)--same condition applies.)
(c) The Company reserves the exclusive right to grant credit and establish credit terms. If for any reason an account shall fail to fulfill those terms, whether by reason of late payment, non-payment, bankruptcy, insolvency, or otherwise, the Company shall remain fully liable to pay the commissions due the Salesperson in accordance with Paragraph 2(a) above.(Very rare in this writer’s experience. Reps usually paid based on what their accounts pay their vendors.)
4. (a) The Salesperson agrees to diligently work the territory assigned to him in an endeavor to secure business for the Company.
(b) The Company shall furnish the Salesperson with all sample bags, hangers, cases and other paraphernalia necessary for the Salesperson to perform his duties, all of which the Salesperson agrees to return to the Company and to be liable for any failure to return any portion thereof at the request of the Company, provided that the Salesperson shall not be liable to the Company for any loss of the foregoing equipment in the event the same shall be stolen, destroyed or damaged under circumstances which do not result from the negligence of the Salesperson or his failure to exercise ordinary care to safeguard such property.
(c) In the event the Salesperson shall for any reason, except as set forth in (b) above, not return samples, the Salesperson shall be billed for such samples at a sum equivalent to fifty per cent (50%) of the wholesale cost for same.(Cost of samples vary…many vendors provide for free.)
5. (a) Either party shall have the right to terminate this agreement prior to the expiration of the term, provided written notice of intention to terminate is given to the other party at least 60 days before termination effective date.
(b) In the absence of a 60-day written notice prior to the expiration of the term, this agreement shall be automatically renewed from year to year subject to the same terms and provisions as contained herein.(Notice term can vary…many companies ask for 30 day notice…some can terminate at will.)
6. (a) The company agrees to furnish Salesperson with a copy of all invoices and orders covering any goods shipped into the above described territory or sold to customers therein, and to furnish Salesperson with a statement on or before the fifteenth (15th) of each month covering the amount of sales for the previous month, and the amount of commissions due Salesperson. The amount due the Salesperson shall be payable at the time the statement is rendered.(Important for the rep to have company adhere to this point.)
(b) In the event of termination of services, the Salesperson shall receive commissions on all orders and sales as provided in Section 2 and on all reorders on such sales or orders up until termination date.
(c) At the conclusion of any twelve (12) month period, as well as upon termination of this agreement, the Salesperson or the Salesperson's designee, upon ten (10) days written notice to the Company, shall have the right, during normal business hours, to inspect and copy, at the Company's principal place of business, all pertinent books of entry, accounts and records which pertain to the Salesperson's orders, commissions and deductions there from. (Rare to see this kind of provision in a contract or rep agreement, but it is a good one. May be hard for rep to travel across the country in order to accomplish, though.)
7. The Salesperson shall not carry additional competing lines without the full knowledge and consent of the Company.
8. The Salesperson will serve as an independent contractor and be responsible to pay all applicable Social Security, withholding, and other taxes. The Salesperson will bear all expenses incurred in his sales endeavors except for those for which the Company agrees in writing to pay.
9. The parties hereto agree that failure by either party to strictly enforce any provision of this agreement shall not constitute a waiver, nor preclude either party from subsequent strict enforcement of any or all provisions hereof.
10. In any action, litigated or arbitrated, declaratory or otherwise arising out of this agreement, the successful party shall be awarded reasonable attorney’s fees to be paid by the losing party.
11. The Company agrees to indemnify and save Salesperson harmless from any and all liability, loss, or damage, including reasonable attorney's fees, which Salesperson may suffer as a result of claims, demands, costs, or judgments against Salesperson arising out of or resulting from Company's acts or omissions, violation of any law or governmental regulation, infringement of any patent, trade mark or trade name, product liability, law suits, or failure to ship acceptable goods timely.
12. The parties hereto agree that this agreement constitutes and expresses the whole agreement of the parties with reference to the representation, and compensation for or in respect to the Salesperson’s efforts on behalf of the Company, and all promises, undertakings, representations, agreements, and understandings and arrangements entered into between the parties herein. No alterations or variations of the terms of this agreement shall be valid unless made in writing, dated, and signed by both parties. It cancels and supersedes all prior agreements and understandings.
13. If any provision of this agreement shall be found invalid or unenforceable to any extent, the remainder of this agreement, or the application thereof to other situations, shall not be affected thereby. This agreement shall be binding and inure to the benefit of the parties and their personal representatives, successors and assigns.
_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

IN WITNESS WHEREOF, the parties hereto have executed this contract and agreement in duplicate at ___________, State of ___ , the day and year first above written.

_____________________________________________________________________________
Company

By:___________________________________________________________________________
Signature Title

_____________________________________________________________________________
Salesperson

____________________________________________________________________________________
Main difference between this contract and the agreement letter is the tone—the “legalese” language if you will…and it is a bit more complete. It covers things that may never become an issue, as you can see from some of my notes.

In either case, familiarize yourself with both. If you feel you have to hire an attorney to decipher or help you with any of this, by all means do so. These two documents are pretty easy to understand. If you’re presented with such a document that runs more than 3-4 pages, I’d say the relationship you’re about to enter may be more complicated than a simple independent sales rep arrangement.

Again, in my own personal history, I’ve rarely had to use contracts. Consider: one time I was able to get money owed me by a company that went bankrupt and it did not involve a contract. A politician or district attorney in another state investigated the bankrupt firm’s claim. He found some discrepancies, and obtained the list of creditors, which included independent sales reps.

He mailed a letter to all creditors asking them to list the outstanding invoices (or in our case, orders unpaid) and approximate the dollar amount owed. I spent about 30minutes doing this…and I was fortunate I had saved many invoice copies for the outstanding commissionable orders (don't discard anything when a company goes belly up, you never know when you may get paid--six years is a good time to retain any applicable documents).

Within a few months I received a check in the mail paying me 70c on the dollar for what I was owed. I asked other reps around the country about this…not one of them bothered to send a claim letter to this district attorney!!!! Their payout: $0.

Would it have been any different if the bankrupt company had previously put together contracts with us independent reps when times were good? I kind of doubt it.

There are several ways to protect yourself, contracts and agreements are among them. But don’t forget the value of doing your paperwork, making sure you are paid for what you’ve delivered. I’ve said it before and it bears repeating: it’s amazing to me I find many reps not doing this. They are leaving a lot of money on the table.

Rep Agreements And Contracts Part One

2011-10-05T13:19:00.000-07:00

It’s come to my attention that my book lacked mention of contracts or written agreements between the independent sales rep and vendor he or she is to sell for. It’s a good point, as some states now require such a legal document.

My own experience is that I’ve rarely had to use them. When I did, the relationship didn’t turn out very well anyway, and it may not be cost-effective to try a lawsuit over state lines. Many industries are kind of close-knit, so if some party cheats the other, the word is out and reputations are an important thing to maintain. Remember too the deal between Arnold Palmer and Mark McCormack of IMG. This was a handshake deal between the athlete Palmer (vendor) and personal manager McCormack (the salesman), and it lead to the world of sports management we see today. No contract was ever signed.

But we live in a country with one lawyer per 50 people, easily the most over-litigated nation in the world. So it’s best to be prepared for such documents.
I’ve seen two different types—the agreement letter and the more formal contract. What follows in this post is a typical agreement letter and notes in bold italics:
_______________________________________________________________________
XYZ Corporation Inc.
www.xyz.com, (800) CAL LXYZ

John Q. Representative
JQR Sales Group LLC
123 Main
Anywhere USA

Re: Sales Representation Agreement Form (Typical agreement form used; can be considered a binding legal contract)
John:

We’re pleased to hire your services as an independent sales rep with our company. We expect you to act as our sales agent for the territory we will define below for as long as it is mutually beneficial to you and XYZ Corp., as well as the individual accounts involved. Either you or XYC can terminate the agreement upon 30 days notice or as agreed. This letter will be the sum of our agreement. If there are particular issues in this agreement please feel free to call and discuss, or send in a separate letter with return of a copy of this letter signed.

Your territory will be the states of ___________, ____________, _________ (filled in as needed by vendor—rep can amend as he/she sees fit). If there are any other accounts outside this area, please feel free to phone us for approval.

You’ll be an independent contractor, so we will not be withholding taxes from your commissions. We will send you 1099s or any other appropriate IRS tax documents. We’ll need following info from you in order to process these and your commission checks:
· Full personal or business name as it will appear on check and in our files.
· Complete mailing address.
· Telephone and fax numbers, plus email address and website URL.
· Social Security & Taxpayer ID numbers.
· Names of any subreps or associates you have working under you.
· Other special instructions you require.

Enclosed with this agreement (or, if it were emailed, substitute “Being forwarded to you”) is a complete set of sales materials that includes:
· Catalog binder
· Representative product samples and display units (Vendor may bill rep for these, with the expectation that the samples be returned or paid for when requested back by vendor, when partnership ends, or when product becomes discontinued. Rep may be responsible for payment of samples not returned).

A list of accounts in your area is attached. Your salesman number will be #62. (Vendor may request the rep handle these existing accounts or may request they keep hands off…or a combination of the two. Vendor will usually give details here as to how accounts are handled by the rep so that the rep gets credited with the commission).

Your commission level is ___% based on the pricing shown in your catalog binder and our wholesale website. If you need to discount from that price for larger accounts, your commission will be adjusted down accordingly. Please feel free to call and discuss before you discount any price. (Some vendors may provide a discounting schedule as well).

We accept credit cards Mastercard, Visa, and AMEX. We will accept COD Company Check with a bank reference. We can also do prepay via check mailed to us or wire transfer. In your catalog binder there is a standard Credit Application form if an account wants Net terms. We can also email this form to you. (Most companies will have policies such as this, or a few variations).
Please read this agreement thoroughly and feel free to call me with any questions or amendment concerns you might have. When you agree to what’s stated herein and any amendments we discuss, please sign and return original, keep a copy for your records. Welcome aboard!

Regards,

Sam Salesmanager

I have read and understand the above letter and by signing below, agree to the terms.

Date: ____________ Rep signature_________________________
Date:_______________ XYZ Sales Mgr ________________________

_________________________________________________________________________________
Don’t hesitate to ask a sales manager (or whoever has composed such a letter) to change anything to your favor. Something as simple as just asking for one additional state or part of a territory can reap benefits. They may have overlooked this area (they may be poor at geography and didn’t realize it was next door to your state!); if you are dealing with accounts in that area already and know the vendor is not being handled there, go for it.

In the next post, we’ll deal with a more formal looking legal contract. Both of these documents can be legally binding. The only difference is the kind of language used and the formality and tone expressed.

“That’s Not My Job” And How It Better Start To Be…

2011-08-22T11:07:00.000-07:00

One of those snippets of AP-sourced news found on my browser home page recently announced that employees who objected to their boss asking them to occasionally take on some different task, might find themselves out of a job when/if the time comes to cut costs in payroll.
As an independent sales rep, or as any kind of entrepreneur, this is “old news”. If you are thinking of becoming any sort of self-employed individual, taking on another task should be second nature. Clean the bathroom, because it needs it. Do an associates job while he’s on vacation because, well, he’s on vacation and it needs being done!
Never once in the AP article did it mention the idea that employees that do willingly and cheerfully take on another task outside their normal job description, are the kind of employees that stand themselves to be promoted when/if that time comes…people do get promoted even during economic downturns, you know. And if you were in the boss’s shoes, who’d you want to promote? Someone who stuck to their “job description” or a well-rounded individual who knew the ropes all around?
Sadly, the fact we have to be told this kind of thing via an AP news blurb is pretty pathetic and an indication that Union Mentality creeps into all sorts of corners of the workplace. Do you like Unions? Would you like to move to Detroit or Appalachia?
I guarantee the boss-man/lady or owner spent many an extra hour cleaning the bathroom, cutting the lawn out front, cleaning dishes, packing and shipping the last 10 orders of the day, whatever it took, to keep the business running. If you want to wonder why they are boss, you might contemplate that.
T.Boone Pickens was a guest on a radio talk show I listened to in the 1980s. He was discussing entrepreneurship in particular. A caller, obviously a young man fresh out of school, asked him “Mr. Pickens, when one first starts out in their own business like you once did, about how many hours a week should they expect to work?”. Pickens answered in as kind a voice as he possibly could, “Ralph (or whatever his name was), if you are even thinking about that, you will never make it in your own business. To be your own boss, you work until the job gets done, or at least caught up”.
The “How many hours a week” mentality is very closely related to “That’s not MY job!”.
This is also why it is important for an independent rep to become as well-rounded and experienced as possible. YOU are your own boss…or you have many bosses. When you find something needs doing, you may be the only one who has the time or talent to do it. If a vendor (a boss, so to speak) needs something more than just someone to take orders and send them in, they will notice someone who’s talented in multiple areas.
Here are some examples of what a rep can do to go beyond “their job”:
· Get as tech savvy as possible, and keep educating yourself to what can be done with today’s technology. One of my own lines can name-drop a store’s logo onto the back of t-shirts. A customer who wasn’t very tech-savvy sent in a cute logo, but no script. They wanted us to add it. The vendor could not, or was hesitant to do so. I took it upon myself and after about 5 or 6 tries to get the dpi-resolution to comply, I got it to where the customer and vendor were both happy with the results.
Therefore the sale was made. It would not have been made if I had simply stuck to “my job”.
· Become a marketing expert. Marketing is the process where you prepare the prospective customer with information and tools so that when they are ready to buy, they buy from you…. or your vendor. Many vendors may be good at producing product, but they may do a questionable job marketing it. This means it may also be harder to sell. Sales are the end result of good marketing, not bad.
Don’t be afraid to offer help to a vendor that has a boring website or lacks any sort of print campaign. Think like the customer and translate that into “Would I buy from this company?”. Make up some of your own marketing materials or enhance your own website and see the results. Share them with your vendors.
· Think like an inventor. Use customer feedback or your own observations to think of what the market lacks…if you see a lot of products adapting a particular theme, fad, or trend, why not products that one particular vendor would be good at and has the production capability to pull off?
Remember the line of t-shirts that could be name-dropped? I suggested such a line to this vendor for several reasons. I had another line of good product of this sort, but horrible delivery. The vendor I contacted was already doing programs similar to what I had in mind, and I stressed they’d have a market pretty much all to themselves. It turned out with a little research, they agreed, and they could do the product fairly inexpensively compared to other things they had…and the new product could sell to their existing accounts as well.
· Be a bean counter. As mentioned in my book “The Independent Sales Rep” (check Amazon.com), you should keep track of your sales and commissions in detail. When you get paid, the check should have a detailed statement as to what orders it covers. It’s surprising many reps don’t do this. Check off those orders on your statement as though it was the bank statement for your checking account. Notify the vendor as to what orders from that period you were not paid for. It may be those orders are still in house and on hold due to the customer not paying an old invoice—you may offer your services as a collector too, but it may not have to come to that. It may be that the orders were lost. Or it may be they were shipped on time and credited to someone else.
Several times I have been owed commissions and went over my list with whatever list (or lack of it) a particular vendor had. When it became obvious to me in some of these cases that the person in charge of commissions couldn’t tell a PO# from a pig’s snout, I made a personal call to the owner/CEO of that particular company and told them: “In all honesty, if I had someone like that in charge my money at my company, I’d have my hand on my billfold 24 hours a day”. In each case, the commission handler was either fired or transferred to another department that did not involve handling money. These bean counters were not up to the job, so there may come a day when an independent rep has to be.
Of course the independent sales rep can’t literally do everything, from production down to shipping…but when things get stalled on account of someone, somewhere, not being able or willing to do their jobs, ask yourself: “Can this be something I can make my job?”. Customers and vendors alike will notice this and you’ll earn their trust.

Where To Manufacture Your Product? China? Think Again

2011-02-23T09:22:00.000-08:00

In recent years, when a start-up company wanted to have their goods manufactured the dominant mindset was “Well, let’s go to China”. Cheap labor was always the answer and China has it in abundance.

American manufacturing companies suffered as a result. They just could not compete. Large companies like Wal-Mart could set up their own facilities over in China and get the job done. Smaller companies, retail or wholesale, could find a source that would be willing to manufacture the items in bulk and ship to warehouses in the U.S.

As a rep I started noticing flaws in the past few years with this supposedly winning strategy. Customers may not have been willing to wait for several months or more that usually was the norm for manufacturing in China. Quality may not have always been there either.

An article in the March ’11 issue of Wired confirms that “Made In America” may be making a comeback. Recent currency rates certainly have something to do with it, but there are other key factors that may have been going on for quite a while.

The U.S., it turns out, has more manufacturers up to speed on robotics. Chinese have lots of cheap laborers, but robots eventually cost less than any human workers…and when things get going real good, robots don’t demand pay raises. Remember when Japan and Korea were both the places to go when you wanted to make something cheap? As those countries became more affluent, their laborers wanted more money. And their costs approached that of using U.S. workers. So you see Japanese carmakers building factories in Tennessee, Ohio, other U.S. states…and often, they are non-Union shops turning out good quality cars. These factories also pioneered robotics.

When one manufactures in China it involves huge quantities to be produced…and that large amount of inventory dollars may not be quite the advantage that a smaller cost-per-item means. U.S. companies may be better off with a domestic maker who doesn’t commit their customer to a boatload of finished goods months in the future. What if, by the time they show up, demand is starting to slacken for that particular item? If it is a new, innovative product, what if, by the time it shows up, someone else has produced a similar product domestically and beat you to the punch? They will have had several months of sales under their belt while you’re unpacking for the first time.

That touches on another aspect: waiting for months for goods to ship. Most customers appreciate fast service. If someone committed to a large purchase order of goods in early 2008, what do you think their reaction was when they shipped that holiday season when sales had plummeted during the start of the recession? There are many cases where a customer wants to hold his cards close to his vest and place an order with a quicker ship window. U.S. manufacturers hold an advantage here.

One company I’ve worked with that sells special, collectible guitar picks had this exact problem. Their Chinese connection promised goods by a certain time and kept putting off the delivery date. Funny, when they set up things in the first place, the manufacturer promised them the moon!

Whether this Chinese manufacturer was an outright liar or not, who can tell? I do know from personal experience, however, that many Asians think it rude to tell the truth when the truth might be bad news for the recipient. It isn’t that they are trying to deceive or cover their own hide…it’s just good etiquette on their part. My Indonesian wife and I needed to get some documents over to a translator during our honeymoon in Bali. We asked a cab driver if he knew the address, he replied he did. Then he proceeded to drive around aimlessly for the better part of an hour when the translator told us by phone she was only five minutes from the hotel. The driver finally admitted he was totally lost. We did not pay him as we got out and started walking...

They are trying to be polite, but would you want to tie up your goods with a guy who could turn out to be like that cab driver?

Brendon Koerner’s Wired piece also mentions the phenomenon where many Chinese manufacturers have reached their limit. They simply have too much work on their hands. What do they do from there? They either tell the American customer they can’t deliver when promised, or they outsource to another Chinese manufacturer in Western China where the quality standards may not be as high…and where the team doing the work has not dealt with the original source. The goods wind up being of inferior quality, and it’s a classic case of “penny-wise, pound foolish”. It’s real hard trying to return a boatload of inferior goods. If an American manufacturer screws up, at least it’s easier to get them to make good.

This leads us to the next problem: copyright and intellectual property theft. It’s well known that this issue dominates discussions between diplomatic corps of China and the U.S. If a manufacturer in Coastal China farms out some of his work to someone near Mongolia, how copyright protected are those goods? Obviously, this is a distinct possibility.

When discussing new product lines or product types with a vendor, it is a good idea for sales reps to mention the kinds of expectations their customers may have and what advantages “Made In U.S.A.” can have for faster service, better quality. In the long run, the extra cost, if there is one, may be worth it.

The Holiday Season—Super Bowl For Business: Don’t Fumble!

2010-12-08T09:22:00.000-08:00

A friend of mine was on an airplane once and struck up a conversation with a fellow businessman. They were talking about, well, business, and this other guy told my friend,
“No matter what kind of business you’re in, a lot of what you do depends on going into or coming out of Christmas”.

The more you think about it, it’s true. My friend had a wholesale lumber business at the time and did not think the holidays really applied to him, but he started thinking more and more about how they should. He could very easily fine tune his marketing to cash in on the money changing hands during and because of Christmas. That’s the key.

Christmas comes once a year, and it offers an opportunity to look upon your business in a fresh way. Retailers ought to see it as the same kind of thing as a Grand Opening. Even if you sell summer garden supplies wholesale, if you don’t take advantage of the buying mood Christmas affords, you really ought to have your head examined.

Years ago in retail, having a well-stocked store was crucial for the holidays. Retailers did not worry about putting everything on sale—this was the time of year when you had captive shoppers who simply had to buy something. So it was also a time of year retailers made profits.

Wal-Mart and online shopping have changed that—this is why you see so many sales going on from Black Friday (the day after Thanksgiving) up to Christmas, maybe New Year’s Day. But it is still crucial for a retailer to have the goods even if they are not making as much margin on them, because how the retailer appears during the holidays will affect return traffic for the rest of the year and into the future.

Think about the chaos that happens during this time of year. If a retailer is running out of best selling goods, if he or she is short staffed, mismanaged in any way shape or form, how do you think the customer is going to react? What will the customer think of this store in April, August, or even next holiday season? Any fool can see that being on your toes during the holidays is going to pay dividends, just as it would during a Grand Opening.

Face it: a lot of retailers ARE in a chaotic state of affairs during this season. It separates the men from the boys. If you arrive at the Super Bowl and fumble in the opening drive, throw interceptions in the second quarter, lay down on defense in the third quarter, and generally poop out because you’re out of shape in the fourth, you are not going to win. But if you’re prepared, you win both in retail and in the Super Bowl.

The holiday season is the Super Bowl. You have all year to realize this. Don’t fumble!!!

Wholesalers and Sales Reps need to be on their toes too. How? The best way is to accommodate the winners you have as accounts who are preparing properly for this time of year. And go a step beyond accommodating them, train and educate them as well.

Here are the ways how:

Marketing Materials
· Right Way: have your catalogs, brochures, whatever you use for lead generators or informational needs, ready to be sent out by September 1st. I know, you’re complaining about department stores putting Christmas decorations out before Halloween. But think about that: do you think they expect shoppers to shop that early? Not really: but they do want to tell those shoppers that they, the store, is prepared. The same thing happens with priming your accounts in September and October. If they receive a new catalog and start preparing early, they will be better prepared when the customer crunch comes in late November. A store full of customers in late November is not the time for a retailer to be doing a thorough order for your products and lines. He should be free to wait on customers and nothing else.

Smaller, fill in orders can be done in November and December, but to do those, the retailer must have an idea of what’s moving, and he/she’ll have a better idea of what’s moving if they base that on a large stock order done earlier in the fall.

· Wrong Way: catalog and brochures released December 1st. You’re playing catch-up at this point. If you get orders, they will be done with half attention, half effort on the part of the retailer. Mark your calendar in June of next year to be on time (September) for having your print materials ready.

New Products
· Right Way: similar to your marketing material, have these ready to go in September. Some industries, like fashion, show products at trade shows almost a year in advance for large chains to buy in time for the holidays (or, for that matter, other seasons). Rolling out new items early gives accounts plenty of time to order them and get a read well before Christmas.
· Wrong Way: releasing any time after November 1st. This is not the time of year for market research and moving planograms around to accommodate something new. The movie industry can get away with Dec. 24th release dates, but odds are you can’t.

Sales Calls & Meetings
· Right Way: sales calls and meetings relating to the holidays should be held well in advance. For major chains, summer, maybe September at the latest. If you are a rep selling to wholesalers, you want to prep them so they are ready to meet with their accounts at that time, so your meeting may occur in the Spring or a year in advance. However, support staffs for major chain stores generally have slow schedules in the weeks around the holidays, and if a meeting concerns matters and issues for the coming year, that could be a good time to schedule a sales call.

· Wrong Way: any time after mid November for individual stores is a bad time to impose your presence on a retailer. That’s when they should concentrate on customer service, not listening to your spiel.

Shipping Schedule
· Right Way: have plenty of order pullers and shipping staff trained to the max to handle the extra business you should be receiving. Step it up a bit—if your usual in house time is three days, make it two. Come out with a schedule and notify all your accounts and reps (and you reps notify accounts too) to get orders in by a certain date to get shipments by Christmas week. Have warehouse personnel constantly monitor what is in house—no orders piled up in the “to do” tray. If there is a stack of boxes labeled for a particular account sitting for more than one day they should know exactly why—credit issues? Awaiting prepay? It should be shipped if there is nothing holding it back.
· Wrong Way: blasé attitude like it’s just another time of year. Giving some problem issue to someone else to do—in other words, all employees, if a customer or rep calls in wondering what is taking so long for an order, don’t give it to someone else to do. As Ross Perot once said, “If you see a snake, kill it. Don’t wait for some meeting to discuss the issue or think someone else will do it.”

Since the trend of holding huge holiday sale events at retail became vogue, the December holidays for smaller retailers have come close to disappearing…but many of these independent retailers are finding the period after the holidays to be just as important, if not more so. Reason? Gift Cards is a big part of it. But as a sales rep or wholesale vendor, be aware that “the holidays” can be considered to be a longer period now…almost Halloween to Valentine’s Day.

Anything that generates foot traffic at retail should be taken seriously, and the holiday season is the most traditional event of this type. Another, more recent phenomenon of traffic generation is the “tax free weekend” many states have adopted in order to encourage sales of school supplies/apparel (Texas started this) to hurricane season preparation (as in Louisiana). Even if a retailer does not sell the goods that qualify for tax free status, they can and should join in on the fun. When you think about it, saving 8% sales tax is not a big deal—would anyone respond to an 8% sale”? Yet they do, and many retailers go beyond 8% to attract shoppers. These events have whetted the appetite of shoppers so much that neighboring states (like Oklahoma) had to stage their own “tax free weekends” because local merchants were sick of seeing migrations to Texas every year at that time.

This shows the importance of that lemming-like mindset shoppers can possess with events like this. So why treat the Christmas holiday season like it is any other time of year? You know traffic is going to increase, you know customers are going to shop (and they will shop for items for themselves as well as gifts). They will be in the mood to spend money, no matter how dire the economy, and they’ve done so for 2010 years! It’s the Super Bowl, don’t fumble!

Prepare for this season and help your accounts prepare for it. It is the most crucial traffic generating time of year and no opportunities should be wasted.

Reasons Reps Fail

2010-10-29T10:57:00.000-07:00

If this economy hasn’t taught us all anything, we really are doomed for failure. Nobody, no company, (and certainly no government) can survive by continuing to spend money they don’t have, or continue to always do “business as usual”. Being in a drastically changing business has given this writer front row seats to witness just how and why businesses, companies and yes, even independent sales reps fail.

Being an independent rep is still a great way to operate your own business…be your own boss…and write your own ticket for success. But like any other vocation, one can get lazy and complacent…can get stuck in a routine and be blind to changes going on around them. Here are some of the common pitfalls my past colleagues or competitors fell prey to and are, as a result, no longer independent sales reps:

Thinking vendors are your sole source of identity: What this means is that you, as a rep, tend to think that your vendors are your reason for being and are your strong point, your main source of value. Of course, vendors you represent are your source of income. But think about it for a minute: why are you valued as a rep? It’s also because of the network of customers and relationships you have. It’s your expertise in getting product placed in accounts. Why do you think vendors ask you to rep for them in the first place? It may be because you have other vendors that compliment their product line, but it’s mostly your relationships with customers they are after.

Allowing this balance between your customer relationships and vendor relationships to go too far toward the vendor side is dangerous. About fifteen years ago many vendors in the industry I am in started using a large rep firm that was looking to expand into other territories. Vendors were presented with a choice by this rep firm: your existing rep or us. Many existing reps lost those vendors, in some cases myself included. I took two actions as a result:
· I started re-examining the other vendors I already had, and vowed to work them a bit harder now that I had more free time, and
· I looked for other new vendors in slightly different product lines that would appeal to my customer base.

Some of these new vendors worked out extremely well. Some were vendors that large rep group also had, but that they were overlooking and not working!

Other reps who’d lost these lines made appointments to meet with the vendors that fired them at subsequent trade shows to basically beg back for their jobs. This would wind up being a waste of time, because oddly enough, many of those vendors would go out of business within a few years! The jilted reps would have done much better by looking for new lines at the trade show, or attending other trade shows to look for new product lines that could appeal to their customer base.

Besides wasting time asking for their territories back, these jilted reps were also presenting themselves in a bad light. Think about it, if someone is fired at any type of business, what image does the fired employee project when they go back to the company and ask for their job again and again?

Relying too much on one big account: big accounts are desirable but to sit back and rest on one big account or a few fairly large ones is dangerous as well. In economies like this, many of these types of accounts are always looking for favorable deals, lower prices…and product that may very well be those other than yours. And let’s not forget that big account could go belly up or be sold to another company who will be now making decisions outside of your territory.

A smart move when you find yourself in a situation where your business is heavily weighed in one account is to use the earnings from the commissions earned to try to expand into other territories, other account types, picking up a few new lines that can redirect you accordingly. Get into more small accounts…and then from there you can possibly move into another big account that you’ve never had a chance to sell before.

Another tactic is to try to get other product lines into that same account—not other brands of the same type of goods, but other goods entirely. Is the account a retailer that sells a multitude of product types? Most do nowadays. Are they a distributor catering to a certain industry? They have to be diverse to make money these days, so why not take advantage of your relationship with the account by selling them something else….this leads to the next point,

Relying too much on one product type: some reps see themselves as selling only widgets or microthingies—they carry tons of lines on that one product type thinking that will last them forever and they will be able to hand it down to their grandchildren. Think again.

Reps that I was competing with or selling alongside of a decade ago when one particular type of product (in our case, t-shirts) were the big commission earner, are now gone. They are selling cars or real estate or something else. They relied too much on one particular product rather than keeping their eye out for other trends that would appeal to the same customers…and better yet, in turn allow them to do business with new types of customers.

Thirty years ago it was thought people would buy phonograph records, or at least recorded music, forever. The head of the retail chain I was working for at the time had a good analogy, and it applies to sales reps as well as it does retail. He surmised that our chain was going to get involved in selling and renting video movies, where most of our competition was resisting. He said “we sell entertainment, that’s why we’re going to try selling video, whatever it takes”.

The analogy was this: in the 1930s, the railroads passed on developing and investing in interstate truck transport. They said “We’re railroads, that’s what we do, we’re not into hauling product over highways”. Last time I looked there is really only one major corporation hauling freight by rail these days: BNSF—the letters standing for decades worth of mergers that resulted in one last standing. But there are many trucking lines hauling freight over our highways—and doing a better job of getting stuff to us because not every storefront or warehouse backs up to a set of rails.

“Record” retailers that realized they sold entertainment instead of just recorded music have survived because they got into video, then video games, and any other entertainment trend they could. Those that did not, have disappeared. It’s also interesting to note even those later retailers that picked up on video when the record stores did not, but then subsequently painted themselves into a corner by not diversifying, they too are disappearing—been to a Blockbuster lately?

Nokia started out a century ago selling toilet paper…now they are one of the world’s cell phone manufacturers! So there is a lesson here. Don’t restrict yourself as a rep that only sells one kind of product. You never know how long it will last, or even if it will last at all.

You’re only as good as your last recent sale..or the ones that will be your future sales: some reps had moments of glory then they just coast along without keeping up with trends and keeping an eye out for opportunities for the future.

If you keep hearing requests from customers for product that isn’t really out there or is being offered by a competitor that isn’t keeping up with demand, get on the phone and talk to some of your trusted vendors about the opportunity that’s being ignored.

Once you’ve landed a successful sale to an account, keep up with it. Keep looking for ways to make it better. Don’t let the product get stale. Don’t let the success go to your head.

There’s probably no better example of success gone stale than the Dallas Cowboys football team. In spite of having a talented team, they continually fall way short of the kinds of success they had 15 years ago. Seeing their frustrations on the field you can’t help but feel they just don’t have the hunger required to have a championship winning team anymore.

Spending money like a drunken sailor: if you can work out of your home, why are you renting office space? If the ad you placed is not getting any quality leads, why have you continued to advertise in that magazine or website for years? If you can get around in a smaller car, why are you driving a massive SUV? If there are 20 companies out there that offer phone, internet etc service at competitive rates why aren’t you at least renegotiating with your present provider? If hardly any of your lines bother to exhibit at a particular trade show anymore, and you have not found any new quality lines at that show in years, why do you bother flying to it and renting car and hotel room—to say nothing of spending a whole week wasting time there? Cut out the fat and quit spending money like a congressman. It’s not necessarily how much money you earn, it’s how much you keep.

Summing it all up, hopefully most reps can survive this economy and emerge even stronger when it improves. Lesson learned: Stay hungry as a rep! Grow your business by expanding your customer base as well as expanding the portfolio of lines you can sell. Keep your eyes out for new opportunities—for new things to learn and profit from.

Is This The End Of Brick And Mortar Retail?

2010-08-05T14:02:00.000-07:00

This week, two bits of news hit the streets—actually, most people got the news hitting their screens, since that’s where they get their news now…and that’s a good clue as to the theme this article will take.

The two news items were these:
· Amazon announced that book download sales (i.e. for their Kindle or other electronic readers) surpassed sales of hardback books on Amazon.com
· Barnes & Noble Booksellers, with 720 brick and mortar locations, has announced it’s up for sale, citing the crossroads it finds itself at with the rising prominence of electronic books mentioned above…

We can learn a lot from the failure of most music retailers who did not adequately prepare themselves for the decline and demise of physical recorded music products…and from what may be B&N’s smart move to get out while the getting’s good.

Retailers will be the main beneficiaries of such lessons but those that support or make a living from dealing with retailers, can learn from these events as well.

It doesn’t matter what type of retailer we are talking about. Many brick and mortar retailers have online versions of their stores, and that’s good…but for those that don’t, they need to realize: Online retailers pose a threat to any brick and mortar location. Lucky will be those who work for a brick and mortar location in a company that also has a strong web presence…and they can switch their job over to that division of their corporation. But for those smaller businesses out there with no web presence or a weak presence online, this needs to be addressed.

Think about it: What makes someone shop at any particular store? There are a variety of reasons, but throughout history the biggest three reasons have always been:
· Location
· Selection
· Price
…and you know what Mr. Brick&Mortar Retailer? The web nails you to the wall in all three!
Location has always been dominant in these three factors. The biggest cliché in retail success formulas is “Location, Location, Location”. If your store was convenient to drive-/ride-/walk- to from the customer’s home or business, or between the two, your store had a distinct advantage. But now, the web beats you all the time, because the customer doesn’t even leave his house to shop!

Selection and price battle back and forth for second/third place. The selection on any web retail location is always superb—look at Amazon vs. just about anybody in whatever it is they sell. Price is the same way, the web can keep costs low and pass that savings along to the customer even if the customer has to pay a shipping and handling fee.

So what’s next, you wonder? Miles of empty storefronts? Possibly…but look around at the types of stores that seem to attract traffic. Notice anything?

For example, there seems to be a plethora of independent coffee shops even in the wake of the expansion and contraction of Starbucks. Almost all of these indies seem to be doing well. But nearly all of them host events like live music and open mic night almost daily. Starbucks didn’t do this as much. They sold exclusive CDs…but so what? Is that going to get you the customer out of the house, particularly when Starbucks usually sold the CDs on their web store as well?

Large specialty retailers like Michaels and Lowes hold seminars and classes on how to scrapbook, how to lay tile, any type of activity involving the product they sell, whether it’s hobby/craft related or having to do with home improvement. These events may not result in a customer actually buying anything at that time, but so what? It’s a form of marketing that a business must do to build its customer base.

Existing retailers must learn how to trick up their business by making their LOCATION a place to go, a destination to be yearned for by the customer. Retail Stores of the future will have to do a better job of enticing the customer out from behind his computer, into his garage, into his car and to drive several miles to get to that location! I’m not saying you have to hold “Ladies Night” like the local pickup bar does every Tuesday night…but as a theory, that’s not a bad idea when you think about it: Give single ladies heavily discounted or free drinks /food and that will entice more single guys who pay full price….plus, do it on the slowest night of the week.

This may mean more retailers are open later at night or longer hours on weekends to accommodate…so be it. If they try to trick up their SELECTION they run the risk of overstocking themselves and killing their turn on inventory and preventing open-to-buy dollars being available when they really need it, like the holidays.

If they try to trick up their PRICES they will slash their profit margins and go the way of many failed businesses in the past that thought PRICE was all that mattered to the customer. A smaller chain or independent retailer simply cannot compete on price with the likes of Wal-Mart, and whenever they attempt, they lose.

Support services and suppliers for retailers, such as sales reps, would be wise to keep an eye out for such opportunities to accommodate the “tricking up” of LOCATION. Don’t just push more SELECTIONs at “better” PRICES, because that will only result in the failure of the brick and mortar retailer to continue in business, or to continue to be a lucrative account.

If Support picks up new product lines or engages in joint venture with other companies that can accommodate just that kind of help to make the location a more desirable one, that will endear them to the retailer and expand upon the role from being a salesman/customer to teacher/student. We all remember good teachers with far more fondness than we do good salesmen, don’t we?

An example? How about the supplier of mugs, coffee makers and store fixtures for your typical coffeehouse becoming suppliers (and better yet, installers) of sound and audio equipment? Or, at least joint-venturing with a music store that does just that kind of installation? In return, that coffee-equipment supplier might be able to get some references from the audio technician of some of the churches, schools, offices, theaters he has serviced…and when this writer last checked, coffee machines are used a lot in all of those places-- so much so that the standard store-bought models often break down.

More and more, the retailer of the future will be providing a service, an entertainment if you will. If you have a retail store you should already have some way to sell online either by your own site or partnered up with Amazon or another web powerhouse. But you must make your store a better location/destination. If you are in any sort of retail support business, find ways to help keep your customers on this trend.

BIGGER Is Better--Oh, Really???

2010-07-09T07:57:00.000-07:00

If bigger is better, why is it the dinosaurs are no longer around, but the small rodents, insects and microbes they shared the world with are?

We live in an age where big government bails out big businesses and banks that are “too big to fail”. Any idiot can tell you these bailouts just postpone the inevitable—that these businesses will go back to their failed way of doing things, will keep making mistakes and they will fail again, but who will be there to bail them out? Big government can change laws and pass bills that temporarily prolong the vital signs of these dinosaurs but they can’t change the laws of mathematics. They can’t spend money they don’t have or can’t get without thoroughly antagonizing the electorate…and they can’t print more money without suffering even more disastrous consequences in the form of inflation.

“B-b-but what are we supposed to do?” Let ‘em fail, I suggest. Let the cream rise to the top and let’s grow in a positive manner. General Motors would have been better off to fail, sell off divisions that they could (are you telling me Corvette couldn’t stand on it’s own alone as a brand when Ferrari can?) and let people who feel they can make things work right in a downsized world do what they must. Smaller, leaner, more efficient and able to turn a profit.

There’s ample evidence that the bigger a company gets, the more it chums up with the government. And there’s ample evidence the government is lousy at running most of what they attempt to run. Listening to members of Congress and other bureaucrats (most of whom have never balanced a budget or run a business profitably) grill executives from Wall Street and Toyota is laughable when you think about it deep and hard.

So what does this have to do with independent sales reps?

Let’s take vendor relationships for starters. An indie rep will try to add as many lines as he/she can, but with the realization the top 20% or so will account for about 80% of their income. So while it might seem that the rep is trying to be “bigger is better”, they know full well they can’t fully represent each and every line in their portfolio.

Vendors and reps should discuss things beforehand to get an idea as to how much business they can do together. The line a rep is taking on may be a huge potential source of commissions, or it may be a line the rep feels can only go into a few targeted accounts. It’s important to think about this on both sides. It’s important too that the small vendor realize that his line may be on a “reserve” status…but that the possibility may come someday when they have a product the rep can really cut loose with. Relationships may be forged that will pan out later. So long as the vendor can keep expenses low in the rep relationship (which is easy nowadays with websites and high quality images available online), the wait for the relationship to strike gold is worth it.

No matter how many lines a rep has, there will always be a select few that are, what the rep will feel, are the strongest. These may have popular trendy items, good perennial sellers, or the vendor may just provide a decent commission structure and have a great reputation for service. Ideally, these favored vendors will combine all of these attributes: “current hits”, great day-to-day bestsellers, timely and fair commissions and service that a rep doesn’t have to sweat over later on. It should be understood too that such a vendor would be morally well grounded and not have a reputation for backstabbing or otherwise ruining the relationship with the rep. If the vendor feels the need to end the relationship it will be done in a professional and open manner.

Here’s where the lure of “bigger is better” starts to threaten the rep—and any business. What if the rep has many lines, but tends to pay attention to a favored few that he or she thinks are great just because they are “big”? They have a lot of trendy product to sell, but they just so happen to be lousy at aspects like paying commissions and service.

In this case, the rep is writing orders mostly for those lines, yet waiting longer to get paid (if at all) and since the service is terrible, may only be getting paid for 40% of his work, since that is the fill-rate potential on these supposed “bigger is better” vendors. This happens quite a lot in many businesses.

Jonathan Knee, in his book Curse Of The Mogul discusses many of the mergers that have happened in the last several decades with media related companies. While many of these mergers looked great in theory and their CEOs (or “moguls”) promised the moon, very rarely did these new mega mergers make money for their shareholders, or provide better products or service to customers. The moguls and their close friends and colleagues (who you just know happen to hover around our nation’s capitol) are the only ones who make money in these deals because, in forming the merger, they specifically structure pay for executives with huge bonuses whether the company is profitable or not. A great example of such a failed venture was AOL/Time-Warner.

Remember the popular book The Peter Principle (Lawrence Peter & Raymond Hull, 1969)? This was the theory that in most businesses individuals would advance through the ranks but eventually hit their “level of incompetence”—in other words, they’d reach a point at which their limitations would become evident. From there they’d either get demoted or they’d remain in that position and cause everyone around them to work harder to compensate for the individual’s incompetence. Sound kind of like what we have today, on a grand scale, from President Obama on down…doesn’t it?

But not down all the way. There are many small businesses and sales reps out there that know their limitations and live within their means. A rep can take on many lines, but the beauty of being an independent sales rep is that he or she can use the weapons (vendor relationships) at their disposal and apply them in order to maximize their business at any particular time.

A rep that focuses too much on being “bigger is better”, by focusing in on dominating one particular product type, or on vendors who outwardly appear superior but are lacking in certain areas, will almost assuredly fail over the long haul. Focusing in on “small” or (as a better way to put it), lean and fit, means the rep can change course quickly. He can react to positive trends or little disasters that would otherwise go unnoticed or cripple a big lumbering dinosaur who would either take too long to react, or won’t be able to react at all because they are so entrenched.

In one of the Dirty Harry films, Clint Eastwood, after outwitting one of his foes and watching as that foe gets blasted to Kingdom Come, mumbles “A man’s got to know his limitations”. This is advice we as a society better start heeding…and it’s great advice for reps and the vendors they work with.

Trade Show Do’s And Don’ts—How To Max Your Potential At Conventions

2010-05-11T08:48:00.000-07:00

In a past blog we discussed how to find new leads. We didn’t touch upon trade shows, so we’ll do that here. Trade Shows, Conventions, Confabs, whatever you want to call them, can be a good way to find new leads/prospects/customers. They can also help an independent sales rep find more vendors to sell for….as well as other business opportunities.

You may attend a trade show that has a number of your vendors exhibiting. If you can offer your help by working their booth/booths for a shift or two, this may allow you to write some business during the show, perhaps find new customers. But anyone who thinks the value of a trade show is just in the business one can write-- there and then at that show-- is missing the point and not maximizing the potential a show can present.

The main purpose of a trade show is to make contacts and establish relationships and reputations. Better industry trade shows make a point of making that happen. Lousy trade shows make that difficult, or a hassle.

Let’s say you’re attending a show and have five lines that are exhibiting. You have booth duty at all five of them. During that time you can write orders…but be sure you are clear as to how much commission you make on show orders. If orders written are for customers in your usual territory, the vendor may give you all the commission. If not, they may split it to cover cost of the booth. If you write orders for customers outside your normal territory, you may have to split commission with the rep that handles that region. Whatever new leads you can keep (via follow-up work) after the show is over and beyond, try to get them. Remember the bold print in the beginning of the last paragraph.

You should reserve some time at such a show for you to be free to wander around and make connections with other potential vendors. Be sure to bring updated résumés with you. Many vendors openly advertise if they need reps. Unless you are sure as to their reputation, be wary of jumping into any relationship right there and then at the trade show. You want to check them out just as they would check you. Tell them you’ll talk after you all get back home.

You may find an opportunity to exhibit a variety of lines by renting a booth yourself at a show, or perhaps sharing a booth with a line that doesn’t mind splitting space with some of your other lines. This may present you with maximum potential in obtaining leads and prospective customers. It may limit your ability to wander the show to find new vendors…so tell your booth mates you will need a break or two each day to check out the rest of the show. Before you take such a break, see if you can study a printed show guide or online directory to scope out vendors whose product lines look interesting.

If you are renting your own booth, take advantage with any advertising or press release potential that you can. Prospective vendors, customers, other potential business relationships may come about because of this. That opportunity may be something you as a rep never even imagined, but the other party reading your press release or ad may think: “This is just the guy we need”, and give you a call with a proposal.

Be sure to bring plenty of business cards, brochures, handouts, whatever you can that can give a short synopsis of what you do. Hand these out to all passers-by and booth visitors…but do so at a price. The price for your handout? Their business card. And be sure their card has their phone, email, all applicable current contact info. You’d hate to get home and find out you can’t do any follow-up with this person.

Make your booth layout inviting, allowing customers to come in and look at the samples you have on display. In other words, tables or other furnishings should not block the front of the booth,. Once a prospect is in your booth, you may find they are easier to talk to; it allows you both to open up. From such beginnings, relationships develop. Remember that bold type in paragraph #3!

At many large trade shows, the industry’s heavy hitters will have enormous booths that may be completely enclosed, with a gatekeeper or guard-type person at the entrance. If you don’t have an appointment here, tough luck. What purpose does all that serve? If they are only at the show to meet with previous engagements, why attend the show? Those booths cost a lot of money—tens of thousands. They could do just as well sending reps, either in-house or independent, out on the road with a bunch of sherpas to lug their new product samples along, and visit those accounts’ home offices.

You may find shows that have a preponderance of such exhibitors may show a lot of foot traffic, but how much of this foot traffic are true potential customers? Are they retailers looking to grow their business? Or are they other industry types who want to do joint ventures or other “inside deals”? Nothing against the latter, but those kinds of relationships may be very limited and they may not include you as a rep.

There are vendors and reps that attend a trade show to write a bunch of orders, then ship them sometime after they get home, then gear up for the next show where the process is repeated. Sometimes those orders take months to ship, and you may find a lot of the samples exhibited at the show were not produced as part of the regular line at all, they were there only to gauge customer interest. If they did not get enough interest, they were not manufactured. This doesn’t sit well with customers that did order those items.

This bait and switch type practice is like a diet of doughnuts. They fill you up, give you a rush…but in the long run end up clogging arteries and killing you.

A trade show doesn’t end at the close of the last day. That moment is a beginning; to go back home and start establishing a steady relationship with as many of the contacts you made as you can. You are adding to your customer base—serve them well after the show and they will look forward to seeing you again the next show. Who knows? They may recommend you to people they know, those people attend the next show, and the process will repeat. This is the kind of repetition process you want, because it will eventually generate business all year long—between shows as well as during shows.

“Buyer” & “Sales Rep” = Loaded Terms

2010-03-25T07:01:00.000-07:00

Time was, a buyer was a person who was an expert at the product he or she purchased for their company, website or store…and the salesman or saleswoman (sales rep) was someone who offered what was available from their company, possibly whittling down the selections to the best fit for the sale, and using persuasive tactics to drive the sale home.

Is that still the case? Not necessarily….

These attributes are still important for buyers and sellers to possess, but in today’s world it goes beyond that. In some cases the roles have reversed a little so that the buyer must also know how to “sell” the rest of his or her company on the way to move the product to their accounts, or consumers on the street. The sales rep has to know how to select the products the buyer is eventually going to cut a purchase order for…in other words, the rep becomes the buyer.

But with more large corporations adapting sophisticated systems that integrate purchasing, warehousing, distributing, re-stocking, and eventual sales on the floor or on a website, the buyer has to be an expert on all that. Therefore, the buyer delegates the “purchasing” part to the sales rep.

The buyer has to be familiar with
· Warehousing—should the items purchased be stocked in a distribution center or are they better candidates to be drop shipped to the point of sale? If warehoused, they should be packaged in a way that makes it cost effective for their order pullers to process.
· Distribution—one distribution center or more?
· Re-stocking—what are the minimums for reorders, and what’s the turn time they can expect in order to avoid empty shelves anywhere in the pipeline.
· How is the product packaged for sale? Does it conform to the buyer’s retail planogram or merchandising layout? If it is an online web-based sale, can the sales rep get his or her vendor to drop ship it directly to the customer who bought the item on the buyer’s company’s website?

Things like UPC codes and EDI (electronic data interchange) could tie all this together. This is where the computer systems from the buyer’s company and the rep’s company “talk” to each other and coordinate purchasing, distribution, re-orders, shipping notification, invoicing and payment.

You might notice how some companies will shift purchasing professionals within their company from one department to another. Some buyer who specializes in young men’s apparel may be transferred over to purchasing stationery and gift items for a few years, and then from there to purchasing shoes. Reason? Training for eventual upper management within the company is a likely explanation. Preventing too much of an “old boy network” may be another, albeit cynical, reason.

The purchasing professional, if they are smart, may take advantage this variety of experience and education and use it if they ever have to find work with another company…or perhaps leaving their job to do be a sales rep him- or herself!

One unfortunate outcome of this “rep becomes buyer” trend is that it is harder to enable a new innovative product to be offered first time to a large account’s buyer. The buyers don’t want to take chances unless the sale can be guaranteed somehow…and even that presents logistical challenges if the rep suggests the account send all the unsold items back to the vendor. Try coordinating that with multitudes of store personnel!

However, more progressive buyers (and companies they work for) may suggest a certain innovation to a company that can carry it off. But, these companies are few and far between on both sides of the equation.

Smaller independent accounts may be the ones willing to take risks on untried products…but don’t be surprised if they start adapting a more cautious stance like their bigger counterparts going into the future.

So if you, as a sales rep, think that the buyer will easily sort through information and pick winning items like a pro, think again. That could very well be your job. If you have enough smaller accounts, or even other big ones, that have given you a good picture of what items sell for your line, that is important knowledge that the buyer may not have. He or she, as a buyer, wants you to be the buyer so he or she can do all the other stuff they are expected to do.

Looking For New Markets To Sell? Go Shopping!

2010-01-28T09:10:00.000-08:00

Economies change and a rep might find entire customer bases disappearing. The last 20 years have seen more changes in retail, buying traditions and markets than anything that had been seen in the previous 100 years.

Home computing and the internet is the reason, of course—consumers able to buy stuff at home via their desktop…but also because technology so radically changed the way things are consumed. Listening to music and taking snapshots are two examples where retailers set up to handle those activities—CD/Record stores and Film Processing centers, are no longer needed.

It’s important for a rep to constantly be adding lines, making relationships with new vendors. Even if the product a new vendor carries is not especially attractive to the rep right now, it may very well be in a year or so. This will enable the rep to morph into similar industries to those that he or she has now, but that are a bit more stable and will last longer than the markets threatened by change.

Make a point of shopping around…look at other retailers and think how they may use products you sell. Look online too—can that website add to their product offerings with any of your lines?

Shop beyond your immediate industry, or learn from other industries you sell to, to prepare yourself for the pitfalls you may encounter with that new category of wholesale customer you may be trying to win over. An example of this follows…

The licensed products industry, particularly in music related licenses, has lost a tremendous amount of account base in the last decade due to the decline in sales of CDs and other forms of recorded music. Listeners download or rely upon Amazon.com for their needs. So, where to turn?

Musical Instrument retail seems to be a good choice. The community constantly cries out they are in need of better margins, which licensed apparel, printed goods, accessories, collectibles provide. The problem is this: most of these retailers are not well-schooled in boutique-type merchandising techniques. So the challenge to the rep is not just to sell them some line or a few lines, that will sit there wasting away among a mass of guitars, amps, keyboards, cables and effects boxes…the challenge is to educate them as well on techniques in setting up a boutique area in their stores.

There is no better way to do this than the rep to share success stories with these musical instrument retailers. Look at some of your other retail accounts—the good ones. What do they do right? What have they tried that turned out to be wrong? What fixtures were most effective? What kind of employee are they looking for who can take care of that department? How labor intensive is it, and what are some ways to make it as little labor intensive as possible?

Luckily most of us in the licensing industry will come across a product sporting a tried and true brand or logo, and in my own case, this would be Harley Davidson. This is the perfect role model for musical instrument stores to follow; indeed I had one particular musical instrument retailer even tell me as much.

Thirty or forty years ago, the typical Harley Dealer sold motorcycles, did repairs, had a shop with some custom parts like exhaust pipes, gas caps, mirrors. Their motorclothes offerings may have just been a few leather jackets. In other words, the customer base was limited to riders and owners of Harley Davidson motorcycles.

Now, look at the typical HD Dealer today. The motorclothes department is a huge boutique that appeals to many beyond that biker customer base. It’s also, by the way, where the dealership makes the best margins of any product sold under its roof. There are apparel items and gifts for men, women and kids who may never ride a Harley their entire lives. What started out as leather jackets, then tee shirts, developed into an entire new variety of industries just to supply these motorclothes departments.

Many musical instrument retail stores today resemble the Harley dealer from 1970…there is little product in the store that will appeal to anyone beyond the musician. And the product that is there is low-margin by their own admission! The rep should share with the musical instrument dealer the things that a good Harley dealership does.

This musical instrument retailer is losing, and will continue to lose, customers in several ways if they continue just doing what they always have done by only courting musicians. Even if "musicians" is a category that grows among the population, that does not ensure this retailer's sales will grow along with it, and besides, he's leaving it to chance if or if not that category grows.

First of all, the starter musician—that 12 year old kid buying his first guitar—is likely to buy at Wal-Mart or Best Buy now. His mom is going to do the shopping and odds are she'll go the least expensive route. Or mom may buy it online, but point is, there are a lot more places to buy than there was years ago.

Another customer the dealer is losing or seeing less of is the collector. Time was that local musical instrument retailer could take in used guitars for trade and resale, and his local store was the place to look for vintage instruments. Ebay has outperformed that task. Not only that, but there may be other retailers thousands of miles away with kickass websites that compete for the same customer.

So to re-grow his customer base it makes sense for the musical instrument dealer to boutique his store with apparel, gifts, accessories and so on…to become a music related overall destination instead of just an instrument store for musicians. That girl who comes in with her rocker boyfriend and sits on a speaker cabinet filing her nails while her weekend warrior tests some new axe should be made into a customer. Offer her some cute shirts, jewelry items, whatever, but quit being a lounge for her!

Who knows? The new boutique customer just may decide to take up an instrument due to their experience in the store boutique…but they may never have visited the store to begin with had the new boutique area not been there. Or they may've come away with a negative impression like "Oh yeah the place I file my nails while Johnny Rockstar ignores me".

So get out and shop, and encourage your customers and prospects to do same. You’ll learn a lot as an independent sales rep…and you’ll be able to teach others. Ask anyone who their favorite teachers were and you’re likely to get a long list….ask anyone who their favorite salesman was and it will be a short list….

Innovating During A Tough Economy

2009-12-17T08:29:00.000-08:00

What can a company or independent sales rep do during a tough economy to help build customer loyalty, or to stand apart from the pack to help bring in more new business via reputation or other word-of-mouth means?

When manufacturing new products can be too dicey in uncertain times, what else is there to do?

Well, it may surprise many, but what some company sells or what some rep may offer may not be as important to an account as how. This is where service comes into play.
We’re fortunate to live in an age when technology has made certain aspects of service easier to handle and to introduce innovations.

Many companies may still use the USPS mindset when it comes to invoicing their shipments. The typical scenario that’s worked for years is this:

· Purchase order comes into the company, they enter and pull/pick the order
· An invoice is generated which shows what’s on the order, how much each item costs, and what the total is including freight costs and any other fees or credits. This will be the bill of sale, so to speak. It gets mailed to the account’s bookkeeping department, where the accounts payable crew sets it up for payment.
· A non-priced version of the invoice is thrown into the box with the goods to use as a packing slip.

Notice your mailbox lately? Read about how much in the red the USPS continues to be? USPS solutions are passe. Several companies of mine have started using a more innovative, Fed-Ex or UPS inspired approach:

· Purchase order comes in as above, and invoice is generated as above, however,
· Invoice gets emailed to the account, along with tracking information, as the product leaves the dock
· If the customer still wants one, a copy of invoice is mailed as before.
· Packing slip is included, but chances are the account will find the previously emailed invoice of more use since all the pricing info can be derived from that document.

Now, which method would you prefer? If you said the first, you are worse off than the professor that gave the future founder of Fed Ex a failing grade when he presented the Fed Ex business model as a term paper in a business course. That professor was at least a product of his times--the '70s. Obviously the second choice is more forward-thinking.

And the neat thing is: this is a small investment that will reap big dividends in customer loyalty. Assuming you’d prefer the second of the two methods above, we’d have to assume everyone else (customers included) would as well! So this is innovation that is less chancy than introducing, or even testing, a new product line.

A business should always look for ways to innovate. Wasn’t it Peter Drucker that said, “Marketing and Innovation are the lifeblood of any company? Everything else is an expense?” And Lee Iacocca helped turn Chrysler around in the ‘80s with the idea that “If you’re not #1 in your business, you have to innovate”. One would add: If you are #1 and you want to stay there, you must keep innovating.

This is just one inexpensive way a company can innovate. How about others? How about those means a rep can also use to innovate?

· Conference calls are becoming far more popular than in years past and there are companies out there like freeconference.com that offer free or very reasonably- priced solutions to this activity.
· Web conferences are another solution offered by technology. Gotomeeting.com or GoToWebinar.com allow far flung parties to view presentations on the host’s computer—without traveling, spending money renting a facility, saving time and expense, but serving customer’s needs in the way these methods can inform.
· Here’s one that sounds contradictory as it means an out-of-pocket solution for a rep, but could save time and keep a customer happy over the long run. If there is any sort of shortage/damage/credit issue that does not get resolved for some reason between a customer and an account, the rep simply writes a personal check and sends it to the account. Incidents like this may not involve too much, and they should not for the rep’s sake! But you know the situation: two or three widgets were left out of the order or arrived broken for the fourth time in the past year. These incidents are an annoyance that gum up the works at the account’s warehouse or store. Rep asks who to send a check to in order to even out the bill…and if the account gives him/her a contact name, the rep does so. This is good PR, it solves the problem, and the rep can go back to the repeat offending vendor and tell them to send any sort of credit to the rep himself instead of the company. Believe me, incidents like this rarely happen again because of the lesson learned: justice delayed is justice denied.

When times get better these types of service issues will stand out and cement loyalty. That will mean more consistent business when it counts!

Your Leads--Where (And How) To Find Customers

2009-10-29T11:49:00.000-07:00

One criticism of my book says it should have covered more on how and where to find customers. Good point. Let’s explore that a bit more here.

The book may be slightly biased toward a supplier-to-retailer point of view, but finding and acting upon leads (discussed in Chapter 7 under the subheading “Leads”) should be similar in any business. Whether you are repping from a raw materials source to a manufacturer, from manufacturer to distributor, or distributor to retailer, or even in a direct to consumer situation, finding new customers is something that should almost be second nature.

Whatever industry you choose to be a rep in, you should be familiar and experienced in that industry to begin with mainly so you will be credible to your customers and targeted accounts. Increasingly, the way to scope out new leads in whatever field you are in is: online—the web, internet, whatever you want to call it. It used to be Yellow Pages or industry guides. Even if you can still utilize these kinds of print materials, you can easily find out what they are and where to obtain them online. (Note: one of the books appearing on Amazon alongside mine is The National Register of Independent Reps, a long-popular guide for the apparel industry).

I mention leads lists in the book; from my experience these can be OK at best and a thorough rip-off at worst. Twenty years ago it was not unusual to buy such industry-specific lists from a company that had developed some program that basically searched out leads from the worldwide web, phone directories (that were uploaded to a data base), and other similar sources. Why bother buying such a list now, when with a bit of detective work on your own computer, you may have access to the same list for free?

Travel can yield new leads—just getting in another town and looking around, or chatting up locals can help you discover possible candidates for you to sell to. Zoning laws usually lump similar businesses in the same areas, or types of areas--ever notice that? This is particularly useful if some new business has popped up since you last visited that area. But again, you can also find such info online via Yellow Pages or new phone listings under that specific classification.

If you are selling to non-retail, in other words to manufacturers or distributors, your target listing will not be quite as large as if you are focusing in on the retailers of your industry. The commissions might be just as good, if not better, since the order size may be typically bigger. In Pharmaceuticals, for example, you might sell for several companies dealing in raw materials used to make drugs, and you sell to about two dozen drug manufacturers. This is the same industry where you might take a different route and sell for a few drug manufacturers to more than 100 doctors and a handful of pharmacies.

In either situation, finding your possible customers should be something you already know how to do. There must be publications in the medical industry that are chock full of ads that can give you a clue. Word of mouth from several doctors or pharmacies might help. Trade shows and other events within the industry will be a source. These last two are still important if you sell direct to consumer; think of “Avon Calling”, Tupperware parties, the dreaded insurance salesman who asks for referrals, or Amway distributors and other multi-level marketers.

Whatever situations you encounter, always study your industry and its players online using multiple search methods and phrases. "Pharmacies-N.Carolina" or "Doctors, OBGyn, N.Carolina", "Pharmaceutical Manufacturers, SE USA" will give you results in many forms.

You may find your business drifting back and forth into a certain sub-culture of your industry. In my case, this recently involved motorcycle-related apparel. Much of the licensed apparel industry I’ve dealt with has been in music and entertainment licenses. A few years ago several of the “Choppers”-related TV licenses yielded huge sales in various products—apparel was just one of them. As that fad died down, I kept a bit of contact with the motorcycle dealers I had sold until the next possible opportunity came along.

It did when one of my lines was awarded a Harley-Davidson® license. So in this case, I did not have to go looking for many new leads. In most cases, I was merely dusting off and refreshing a sales rep/buyer relationship. Morale here: keep those Rolodex cards because you never know when you’ll use them again. As for other motorcycle accounts I was not familiar with from a few years before, well, it’s pretty easy to hunt down a website to get a list of official Harley-Davidson dealers in whatever region you want to explore.

It’s important to realize that growing your business via new customers is just one way to do it. Other methods involve selling more products to existing customers (you being an independent rep should be able to handle multiple lines) and getting customers to come back more often to order from you (sales, incentives, promotions, seasonal opportunities, etc.). It’s also important that once you have found a new set of leads, you convert them, in other words, get them to place that first order!!! Not all leads will buy from you the first time you contact them. Keep after them, listen to them, and alter your sales pitch accordingly.

“A good rep sells solutions” is as true as it ever was, and this gives a clue to another way to see your business increase. Look for flaws in your accounts, listen to their frustrations. From there, see how you and your products, or better ways to merchandise and display your products, can help. As much as 33% of my present six-figure income is attributed to such “solution-selling”.

These other subjects will be covered in the future…for now, though, try to schedule yourself to find new sources of leads at least once monthly using any of the methods discussed above.

What Time--Have We Forgotten How To Figure This Out?

2009-10-01T08:12:00.000-07:00

This will not be a treatise on “time management”; even though there are many folks out there that need time management skills, and there are plenty of books and articles already on that subject. Rather, this article will be about the fundamental basics on how to tell time. Does it seem like nobody knows how to do that anymore?

It goes way beyond hassling your kids to wake up, be ready, arrange to be dropped off or picked up—at a certain specific hour, anymore. It happens in business a lot too, and it may be one of the reasons why it seems like it’s hard to get things done these days.

Here’s a typical exchange:
“Hello, this is Mr. Smith, and I’m returning Mr. Jones’ call, is he in?”
The receptionist, if a company has one (as opposed to a phone tree from Hell, but that’s another story), says
“No I’m sorry he’s not. May I ask what this is regarding?”
“Gee, I don’t know, he called me.”
“Well would you like to leave a message?”
(What does one say to this?!?!?!)
“Um, no thanks…tell you what…do you know about when he will be back?”
(Here it comes!):
“Oh, I imagine it will be later”.
“What time (emphasis added) later?”
“Probably this afternoon”.
Afternoon, as defined by just about any dictionary, covers at least a six-hour period from 12.00 noon up to closing time, so this answer is insufficient. Most of us will start to feel like we’re getting the brush-off at this point, but remember: Jones called Smith in the first place! And since hardly anyone is courteous enough to return calls anymore, why should the courteous Mr. Smith get this kind of aggravation?
Smith will continue:
“OK, what is a good time to call him back this afternoon?”
Receptionist says “How about after lunch?”
Oh, does everyone eat lunch at the same time, regardless of time zone?
“What time is that?”
Smith asked this question a few minutes ago, you’ll recall, and has now asked it three times.
Finally, the receptionist says:
“From 1.00 to 2.00 pm”.
Well, at least that gives Smith a 60-minute window of opportunity. He should now ask,
“What is a good time during that hour when you think he’ll be catching up on his calls?”
…But chances are good this will lead to more frustration.

Whether communicating or setting meetings, appointments, whatever… the ability for anyone to tell anyone else what the big hand and little hand should look like when they want to get something done—well, it seems to be a lost skill. And digital clocks should have made it easier, but they didn’t.

Is Technology the culprit to blame here? After all, cell phones have time on them now, and it’s automatically 100% correct time, no matter the time zone you’re in! It gets set and changes for you automatically—how cool is that? Your PC has the time, complete and accurate, all the time, down in the corner. These devices also have functions that notify you when an important time is coming up, or you can use the good old fashioned appointment diary found in any stationary or office supply store. So…What’s the problem?

We don’t need as many watches or clocks all over the place like we used to, our devices have kind of solved that problem. But we still need to know: WHAT TIME?

I would be real curious to see results of any study that investigated how much wasted communication and wasted time results with needless back and forth phone banter, emails, whatever-form-of-dialog by someone’s inability to simply name a specific time on the clock. Communication of this nature should involve only a few lines of dialog, or two e-mails—one to and one from. Why then, does it seem like it takes ten times that amount to answer the question “What time?”

The clock still has either a face with 1 through 12 going around it, or it is a digital clock reading out the current time in easy-to-read numerals. Has anyone invented a clock (that was not a joke) that reads “After Lunch”, “Later”, “This afternoon” or “Sometime tomorrow”? No, they haven’t. Clocks are pretty much standard all over the world.

Save everyone you do business with some time. Be aware how to schedule time, tell time as well as use time.

2009-08-24T07:48:00.000-07:00

Is Your Wholesale Business Down 20-30%? Remember 80-20…

In tough economic times like these, it is common to see companies cut back on important functions of their business like service and marketing, as well as other aspects. While understandable, it may not be forgivable and could wind up being fatal.

If the old adage of “80% of your business is created by 20%” is true (it is, believe me), concentrate on that 20% wherever it may be. Now it may actually be 70-30, 90-10, but you get the idea: Most of your income is commanded by a smaller percent of another aspect of your business. So we’ll use 80-20 for convenience sake…. 20% of what you might ask? Well, it could be several things:
· 20% of your accounts make up 80% of your income
· 20% of your product offering—in other words, if you have 100 skus to sell, 20 of them make up 80% of your business
· 20% of your sales force write 80% of your sales.

In matters regarding service, from a rep’s standpoint, it’s recommended you don’t sacrifice any aspect of getting orders to whatever customers you have left and whatever new customers you can get. If you can sustain the same level of service, with fewer staff working an extra hour or so, great. If turn time winds up being an extra amount of days, but is still within reason for your industry, try for it but at least notify your account base up front with an open letter expressing apology and regret, but with the promise to strive for the same level as you have had. Whatever you do, avoid surprises and disappointments falling into the customer’s lap.

There can be competitors of yours who will figure ways to tighten up their service during an economic downturn, and if they can, they will. And guess whose business they will try to win over to their side?

When you think about it, “other aspects” mentioned in the first paragraph above could very easily fall into service topics. Things like streamlining your bookkeeping or production, while maybe not as visible to your customers, will increase your efficiency and save you money and time, both of which will make it easier to deal with you from the customer’s standpoint. Making your bookkeeping completely online can allow your company easier notification of shipping and billing to your accounts…and eliminate mailing costs when it comes time to send an invoice to an account. So look for 20% of your service aspects to improve, and it can affect the remaining 80%, yielding greater efficiency.

Now let’s look at your marketing and sales efforts. Any scrimping here is also potentially fatal as marketing is your lifeblood. If you have to adjust the amount of expenditure you allocate for your marketing, so be it, but be careful.

If you have print brochures, catalogs, pamphlets or flyers, why not concentrate on the 20% of goods that bring you your 80% of sales? Be sure to prominently mention your website, which should be a portal to all that you sell, so that if a customer or prospect is reading this marketing material, they understand you have much more to offer. If you’re worried about that huge catalog you have to publish every year and this year it will be expensive to compile, think about how much you can save by whittling it down to 20% of its normal length.

If the expense of contacting your customer base is too high for today’s economy, concentrate on that 20% of your account base. By this, what is recommended is to call on that 20% as if nothing has happened…as if the economy is still roaring. But don’t neglect the remaining 80% of your accounts--treat them to email blasts, calls every other month (instead of monthly) or whatever it takes to keep them informed. You should still try to find new accounts whenever and wherever you can. Never quit here….and if you can still keep in touch with all of your existing accounts regularly, do so…this step described here is only if the actual contact of your accounts is expensive in a way that puts a dent in your budget during tough times.

What about your sales force—whether internal or external, as in using independent sales reps? Here, cutting out 80% in favoring your top 20% producers, is NOT recommended. However, in your honing of your marketing, you may find that the top producers will work more effectively anyway. All of your sales force should be communicated to regularly during good times or bad. And the best thing to communicate to them is by telling them what exactly you are doing during this downturn. Tell them about your truncated release schedule, but that you still have new releases. Tell them about any service changes so they can, in turn, tell your customers. Stress you are available for any sort of input as to how you and the sales professional can best get results together. For example: If you’ve streamlined your print marketing and stressed use of your website…and your salespeople find your website difficult to deal with, that needs to be taken care of.

Once business gets back to normal, hopefully these cost cutting and efficiency measures will help your business emerge stronger than your competition's. These ideas can also help transform your marketing and service aspects to the point that not only will you have kept and added more customers than your competitor, but that you have done so more profitably by eliminating waste and overhead. And profitability never goes out of style, in good times or bad.

Have You Noticed It's Getting Harder To Get Things Done?

2009-06-30T07:02:00.000-07:00

The present economy has forced a lot of us to cut back staff and give those who remain working more stuff to do. This may very well backfire and leave a company or business hurting just as they need to be getting stronger in spite of the effort to get lean and mean.
Has this happened to you? Whether you're a customer or supplier, you contact someone, agree to have a project done or at least underway by a certain date, you call back and they haven't even started. Or, worse, you're on the other end of that situation: they call you back and you're embarrassed to say you haven't had time to get the work done.
It doesn't need to be this way and for the sake of your future in any business, it shouldn't be; it better not be. Recessions and Depressions have a cleansing effect--they weed out the, um, well, weeds. The rotten tomatoes, the bad eggs, the old, lame and unfit. With lousy time management skills, lousy management skills overall, you will be weeded out. Now is the time to get fit when it comes to these vital skills and if you do, when times get better, you will reap the benefits.
Here's a few observations and ways to avoid common mistakes. Are you falling prey to these?:

1. Have a detailed checklist of what you need to do today, tomorrow, next week, next month--and stick to it as best as possible. Outlook has a scheduling function, if you like it, use it. If you want to use a daytimer, legal pad, another computer program, great. But USE them. Add detail daily--in other words, if you've scheduled yourself to call XYZ Corp once a month just to touch base, add particular details like followup on the last order you shipped them...telling them about some new product coming next month that suits them perfectly...those kinds of things.
2. As you do things on your checklist, check them off, and if you don't get to accomplish them, schedule them tomorrow, or next best day--don't let something slip through the cracks. Examine your "to do" list often during the day to make sure you're doing these things at the best time. Examine at the end of the day...did you get it all done, or re-schedule? I still use a sheet of paper with a list of things to do and I have a pencil in hand all the time.
3. When you're on the phone have a pencil in your hand and paper ready...always--if I had a dime for every phone conversation that lasted several minutes, then I asked the guy on the other end if he'd written it down only to hear "oh wait a minute, lemme get a pencil", I'd be a millionaire. But at least he's getting the pencil. Don't waste our time by not being ready when you ought to be. Have a pencil handy from the start of the call....or be at your computer so you can document what needs to be done. If you tell yourself "I'll have to remember this when I get off the call" something can and will come up, and there is a good chance you'll forget.
When you email or tell someone "OK, I'll do this" cc yourself if you have do, but do it, don't forget it.
4. Lunch-- what an absolute timewaste. I'm spoiled, I work out of my home. If I'm hungry, I just get a quick sandwich or snack and I'm back at work immediately. However, I guess we have to avoid being accused of being slave drivers, so a lunch break is something we have give employees. However, here's my major gripe: does everyone in an office have to take their lunch break at the same time? Why not stagger it a bit? The whole AP department is out and you need an invoice number now? The USA has 4+ time zones. It would be extremely effective and efficient, to leave at least one or two back at the office who can answer calls if need be--because not everyone from coast to coast is taking lunch at the same time you are. This leads to the next few points...
5. Vacation--try to have vacations staggered a bit too. Offer an extra day to employees that may take vacation during an off period. Vacations occur a lot during crucial build-up times to sales peaks too, for certain industries. Companies should not grind to a halt because some staff are on vacation. Effective management and time management means things are designed to go smoothly even when someone takes time off.
6. The Secret Key will anger your customer--by "secret key" I mean this: so and so is the only one in the office that can answer a particular question or find a particular document. If that person is at lunch, on maternity leave or on vacation, and you have a customer who wants to know....you've got a good chance of thoroughly lousing up the customer's day. Remember this too: we all die sometime. What if someone, God forbid, passes away? Get your staff to familiarize others around them with what they do and give briefings on where things are in case they happen to be gone. Football teams always have a backup quarterback they pay decent money for. Take a hint.
7. Technology can help--if you want to have staff come in earlier or stay later, that's fine. But try subscribing them to a system of access to their work computer from home or when they have to travel. Supply them with Blackberries so they can keep on top of their email. This may prevent things from piling up and allowing them to be more efficient. Use conference calls or web conferences, which eliminate the need to spend the whole day travelling.
8. Allow for the unexpected--if you keep on top of everything using some of the suggestions above, you'll have the great little gaps in your work day that allow for spending more time on research, competitive shopping, etc. And, in the event that something happens and you suddenly get busy, now you are prepared and you don't have a pile of unfinished stuff that gets even bigger. Think of the last two minutes in a football game. Teams prepare that "two minute drill" for good reason. It's hoped in most games it won't be needed, but when they find themselves in a close game and they have only two minutes or less to take the lead and hold that lead, time management is crucial. And it is not just in the last two minutes that managing the game and the clock become important--a team that is still capable of winning will have managed well the entire game leading up to that point. Customers will remember the company that could keep its head when all around them were losing theirs, just as we remember those games when Joe Montana took his team all the way down the field to take the lead and win the game.

Many I talk to in various businesses are remarking on this same subject that I used as the title of this piece. If you can avoid having the same thing said about your business think of how much further ahead you will be when times get better as they inevitably will.

You’ve Been In The Auto Industry For Years…And You’re Unemployed…What Do You Do?

2009-05-28T09:10:00.000-07:00

Whether working for GM, Ford or Chrysler, dealerships, assembly plants, white collar or blue collar…if you haven’t figured out your industry is changing and will not (repeat not) go back to being the way it was ever again, you are in far more trouble than just being threatened with job loss. The ways things have been done by Detroit are about to change drastically, forever.

It’s sad when an industry simply won’t face facts. The music industry is another case study. Those that adjusted and could deal with the changing market survived and moved on. The rest had to settle for whatever live dealt them…like selling insurance instead of tunes. But if you love the auto industry and that’s all you want to dedicate your working life to, what do you do?

What follows, I hope, will be a way that perhaps 30% of those laid off from the auto industry can keep a foot in the door and eventually get back into it full time, working for themselves, making a decent living. Forget about a union lording over you. Forget about entitlements—that no one is going to be able to fulfill anyway. This 30% could amount to as many as 100,000 new jobs, if estimates to the total jobs being currently lost are correct.

In the June 2009 issue of Wired, Charles Mann discusses “Beyond Detroit”. The top down model the big three automakers is dead, he says. He theorizes that, like computer companies did in the 1980s, where many small firms contributed to the overall advancement, innovation, and development of the business, the American auto industry will have to do that as well. The new economy in many industries, including the automobile industry, will favor the small. Detroit will have to incorporate ideas from outsiders as never before.

All the myriad parts of what makes up a typical car—like the AC system, transmission, safety devices, electrical, etc. have been traditionally made and developed internally for the most part, from each auto manufacturer. What is starting to change now is that there are small companies popping up that specialize in niches for the automobile manufacturers. Mann gives example in Transonic Combustion of Camarillo CA, who are working on a whole new breed of fuel injection systems that will enable cars to get as much as 100 miles per gallon.

Rumors of such possibilities have floated around for years, even decades. But now the market is changing. Automakers are going to have to start looking at small companies that can pull this kind of innovation off. Particularly when we have Washington DC dictating what goes on in more aspects of our lives and businesses.

Now, back to the job opportunities this suggests. Sure, you can go to work for one of those small firms. No telling how long the firm will be around, but at least it’s a job opportunity and besides, welcome to the real world where a lot of us have had to deal with such frequent turnover no matter what industry we may have worked for. You may have the technical expertise to be one of those innovative small manufacturing companies... but what if you can’t afford the risk? What about being an independent sales rep in this growing field?

The day may come when the average automobile trade show will be still dominated by big booths featuring new car models, but then more, possibly a lot more smaller booths housing vendors who specialize in the niches, like Transonic Combustion. And if they are like many other industries, these smaller booths will have a sign out front saying “Reps Wanted”. Independent sales reps, that is.

Picture the possibilities for a guy or gal who kicked around for 20 years with GM or Chrysler. He or she knows the industry cold, and knows people who are still working for those firms and in other parts of the industry. He or she can represent several lines of small, innovative new firm specializing in specific parts or systems to sell to these large auto makers. If this rep can land one or two deals a year that mean millions for these companies, and make a percentage of the deal in commissions, this rep is doing pretty well financially. Well enough that he or she can buy their own health insurance and start funding their own pension.

Executive recruiter and radio host Martin Birnbach says that 70% of people out there need to work for someone else, need mentoring, supervision, to be led in their work environment. That leaves 30% who are self-starters, that prefer to “be the only SOB they want to work for”. An Independent Sales Rep is an example of this. Unlike the tech-savvy entrepreneur who wants to try to start their own firm, the rep can start to work for him- or herself with very little overhead.

The entire auto industry would do well to let that 30% loose, let a lot of them be the independent sales representatives who can facilitate the coming-together and meeting of minds between the large automakers and the small innovative start-ups. It may be chaotic, but from chaos comes change. And no one would disagree change is exactly what the auto industry needs.

5 Things A Vendor Can Do To Help Reps Sell More Of Their Goods

2009-05-11T10:15:00.000-07:00

After a long conversation with a new sales manager at a vendor that hasn’t seen much action from me lately, I noticed she sent out a blanket email asking other reps for “Five Things You’d Recommend Us Do” to get more business. Great move, and a great topic.

Many vendors do not try to get this kind of feedback and they really ought to, be it from reps or customers themselves. I’ve seen many vendors go along their business thinking they know what they are doing but they find out too late they don’t.

It reminds me of a trip to a shopping center during the holidays with my kids when they were ages 2 and 4. I had my 2-year-old daughter in my right hand, my 4-year-old son in the left. He was at the age when he was figuring he could do everything on his own, he didn’t need hand-holding. The mall was packed with crowds of shoppers, and I kept telling him to hold onto my hand. He kept arguing. So I let go and told him to stick close.

Naturally, his attention started to wander and he drifted away in the crowd, but I kept an eye on him. He looked up and realized he was lost, and the panic on his face, the tears welling up in his eyes were unmistakable.

It’s not unlike the vibes we get when we see a vendor who’s steadfastly refused any sort of feedback for years, finally go down the tubes and out of business.

So here are five things they can do to help us reps, and by extension their customers, sell more of their product:

1. Have Marketing Materials. A website is fine, but keep it up to date. You should have print also—don’t use the lame excuse you’re “going green”. LLBean uses both print and website marketing to catalog their product and they are probably more “green” than you’ll ever be.
2. Share Marketing Materials. If you enter into a relationship with a rep it means you want access to the relationships he/she has with customers you probably don’t have. So if the rep wants X amount of catalogs or passwords to your website, for goodness’ sake, give them to the rep! Unless of course you have all the business you can handle, but then…how many vendors can make that claim?
3. Have Something New To Report. Monthly, weekly, semi-annually—whatever cycle applies to your industry. This gives the rep something new to, in turn, tell the customer. And besides, it makes you as a vendor look relevant. A monthly sale on some particular item or category among your products is an easy way to do this. Just having new releases is good, but spice it up a bit. Sales, promotions, thematically inspired stuff is good and makes customers eager to hear from you via the rep.
4. Logistics—keep them up-to-date. Not only your website and catalogs, but your bookkeeping and the way you communicate. When every other vendor is sending art and information via email with PDFs and Jpegs, if you are faxing this kind of information, a rep will tend to ignore or forget you. E-invoicing is another great new feature. Take advantage of technology to make everyone’s job easier. Your reps and customers will love you for it.
5. Respect Reps’ Images. Never, ever, make the rep look bad to a customer unless they really truly are bad and have misrepresented your product or corporate image. Even if it's done unintentionally, correct it yourself, don’t leave it up to the rep. For instance, let’s say you’ve just hired a new receptionist who is ignorant of the fact that an order a rep placed three weeks ago is stalled in credit. That customer calls to ask where his order is and the new receptionist says “We don’t have it here”. The customer is instantly going to blame the rep. When this occurs, contact the customer and apologize for the confusion. I’ve personally stopped selling anything for lines that did this—why bother when I’ve got other lines that thoroughly train anyone before letting them answer such queries? Even if it is an isolated case, the vendor should waste no time taking corrective action. Your reps are partners so treat them as such.

There are more things that vendors can do to ease their relationships with reps; these are the most obvious and any well-run company ought to do these things even if they don’t use independent sales reps.

The Perfect Sales Career During This Tough Economy

2009-04-20T10:51:00.000-07:00

There are around sixteen million people in the USA that classify their career as "sales". How many of these professionals feel safe and secure at their job in this tough economy?

Hard to tell, but I'd say many of them (30% to be conservative) either fear for their position with their company, or fear that their company will be bought out and then downsize, or disappear altogether. Also, there's perhaps 10% in addition who are self-starters anyway and are itching to branch off on their own. These entrepreneurs at heart would be anxious to leave after learning all they can at a steady job, whether the economy is good or bad. So, what type of vocation would be perfect for all these folks--ie, about 40% or more than 6 million sales pros currently in this country?

Easy: they should be Independent Sales Reps.

By easy, it's meant the answer is easy. Actually being an Independent Rep can be tough. Consider these arguments in favor of taking that route:

You often work out of your home
You can, and should, use your knowledge, skills and contacts acquired through your years dedicated to your career and industry. Being an indie rep isn't an entry level position, so do get experience under your belt and work up a sizeable rolodex or contacts list for your particular field. And don't burn bridges!
You won't require much overhead in supplying yourself with tools of the trade--computer, copy machine, phones, fax, a decent car...most of this stuff you probably already own or can easily afford and place in a spare room in your home to use as a home office.
You can start small and keep working your way up. Take a part-time job in retail or some service industry if you've been laid off, and then work on getting a few lines into some accounts you have established contacts with...next thing you know, you have some more customer contacts, then more lines to sell....see how it works?

OK, so why should any companies consider hiring you on?

First, you work for commission only...and those commissions can add up. It's not unusual for indie sales reps to make high five-figures, up into six-figure incomes. Therefore, to the company paying the commissions, you are worth only what you actually deliver...a novel concept in today's entitlement culture. That culture, by the way, is now ruining the biggest and most powerful companies of the last century. Just ask General Motors.

Second, the company doesn't have to train you or pay any benefits or perks. You do all this yourself. But it can be done, don't worry--besides, they're paying you just to deliver, no matter how that's accomplished. It's estimated the cost of hiring, training and paying benefits to an employee is close to $40K--and that's before the employee really starts to kick in and pay for himself by being productive. If a company can get results without that expense, there is another attractive aspect of using independent sales representatives.

Established companies that are looking to cut costs in this economic malaise would be absolutely crazy not to study the option of using independent reps, even just to supplement their in-house sales staff. These same companies outsource almost everything else from payroll to janitorial services to human resources to customer care. Why not sales?!?!? If there is one plumb account that they don't have in their client lists, and YOU can bring that customer to the table, at $100,000 in sales annually, don't you think any sane Sales VP would be willing to give you a percentage of that? Even if you still hold some kind of part-time gig or "day job", that's not a bad commission check to start out with. And from there you find more accounts, and more lines to sell.

A lot of sales professionals used to a steady base salary + commissions check may live in fear of being self-employed; that is natural. But keep thinking how great it would be if you called the shots! If you work up a portfolio of several dozen lines to sell to scores of accounts, your business will grow to the extent that even if one of those lines fires you, so what? You have several dozen more to fall back on.

And you'll be helping the country... How? you might ask? Having more people self-employed means more people paying taxes quarterly. Once these people go from having taxes deducted from their paychecks (a passive way to do it--face it, one gets used to the net amount they are paid) to having to write that massive check every few months (an active way to do it), paying taxes becomes a much more acutely aware activity. And this leads to citizens who are far more demanding on the government to quit wasting our money on self-serving schemes that pad every spending bill. There's nothing more fearful to career politicians than an informed and enraged electorate.

To learn more about how to be successful as an Independent Sales Rep, read my book, available on Amazon.com: http://www.amazon.com/Independent-Sales-Rep-Successful-Successfully/dp/1439224153/ref=sr_1_1?ie=UTF8&s=books&qid=1240252216&sr=1-1

...And if you are a small company who needs outside sales help--the book has a lot of helpful information in it for you too.