Commission-based freelance sales agents

[JMLST]

Can anyone please offer any advice about using commission-paid freelance sales agents to sell your products? I'm in the equine industry manufacturing my own customised products myself at home and selling them through my website. Been going about five years. Still very small but growing all the time.
I have too many ties at home to get out on the road myself (sadly) to horse shows and events but am thinking about recruiting sales agents to pay commission to to sell my products on my behalf. Possibly alongside some non-competing businesses. I have a number of horsey friends/customers who are desperate to make extra cash at weekends. Some are already selling beauty products through their network.
There's a database of established freelance horsey products sales agents which costs about £500 to buy but I've heard recently that none of these agents are taking on new brands.
I've been talking to a couple of wholesalers about selling to them but they want a 60% discount on RRP and I don't have enough margin since my suppliers won't give me any discounts with bulk orders (maddeningly). Can't use other suppliers because my products are too niche - it's taken me years to get the suppliers I have.
Anyway! Anyone done this before and have any advice? I'm wondering about who'd cover the cost of the samples, when the sales agent would be paid, contracts, what would happen with returns and commission payment and so on.

 

[Mark T Jones]

The good news here is that you have a clear & defined market/route to market.

My other half is in the equine industry; whilst she personally has no interest in selling 'product', I do know that many others do like to have additional revenue streams.

It's hard to envisage why no sales agents would be taking on new brands - perhaps the subtext is that they are being inundated with junk / MLM / fake 'opportunities'. A good sales agent will always be receptive to genuine revenue-creating opportunities.

 

[MBE2017]

Your problem OP is you are too cheap, hence easy to sell as a cottage business, but not enough to pay to go through stockists.

Out of interest, if you cannot afford 60% for a wholesaler, how much do you think agents would want?

 

[Chris Ashdown]

Are you buying in a finished item and then customising it, in that case i can understand why they are not offering a small buyer discounted sales, your way forward may be to make the whole product or increase your sale price significantly to be able to pay for better marketing costs

 

[Mr D]

Commission only - means the sales agent has to get a decent percentage from every sale.
Saw an offer like that recently (not equine) and suggested I could do it for 45% of the price. Sell a £10 item, make £4.50.
And that low only because I knew I could shift a thousand units before Christmas. The retailer was thinking more along the lines of 5%.... far as I know he's not yet selling.


The problem is you get a lot of bad sales people / inexperienced sales people drifting into commission only jobs, doing a little work, finding out how bad it is then moving on to paid work or back to unemployment.
The decent sales staff may occasionally pick up a commission only role because of the percentage but already got their bills covered by other sales. But finding them? Can be a problem.

 

[JMLST]

Your problem OP is you are too cheap, hence easy to sell as a cottage business, but not enough to pay to go through stockists.

Out of interest, if you cannot afford 60% for a wholesaler, how much do you think agents would want?

Lots of my customers say I'm too expensive
I'm told that sales reps typically take 8-10% in my industry.

 

[JMLST]

Are you buying in a finished item and then customising it, in that case i can understand why they are not offering a small buyer discounted sales, your way forward may be to make the whole product or increase your sale price significantly to be able to pay for better marketing costs

I make the products from scratch. I buy rolls of fabric, bindings, pipings and so on and make the products to order. Also offer embroidery and vinyl personalisation.
My prices are considered high in the industry since my competitors mass produce their products in the Far East typically.

 

[JMLST]

Commission only - means the sales agent has to get a decent percentage from every sale.
Saw an offer like that recently (not equine) and suggested I could do it for 45% of the price. Sell a £10 item, make £4.50.
And that low only because I knew I could shift a thousand units before Christmas. The retailer was thinking more along the lines of 5%.... far as I know he's not yet selling.


The problem is you get a lot of bad sales people / inexperienced sales people drifting into commission only jobs, doing a little work, finding out how bad it is then moving on to paid work or back to unemployment.
The decent sales staff may occasionally pick up a commission only role because of the percentage but already got their bills covered by other sales. But finding them? Can be a problem.

Yep it's a challenge! I'm told that established sales agents typically take 8-10% when they're selling to the trade. I'm not aware of anyone who does pyramid selling or tupperware type parties (which is kind of what I'm thinking of).
It's common for my orders to come in at £75-100 a product so there's a decent chunk of money to be made at 10% if the sales person is selling other brands too. It's very feasible (if/when events pick up again) that an average sales person could sell at least 20 £100 products in less than half a day.

 

[JMLST]

The good news here is that you have a clear & defined market/route to market.

My other half is in the equine industry; whilst she personally has no interest in selling 'product', I do know that many others do like to have additional revenue streams.

It's hard to envisage why no sales agents would be taking on new brands - perhaps the subtext is that they are being inundated with junk / MLM / fake 'opportunities'. A good sales agent will always be receptive to genuine revenue-creating opportunities.

I did wonder if this was a reflection on the products being manufactured by the person who told me this.

 

[Mr D]

Yep it's a challenge! I'm told that established sales agents typically take 8-10% when they're selling to the trade. I'm not aware of anyone who does pyramid selling or tupperware type parties (which is kind of what I'm thinking of).
It's common for my orders to come in at £75-100 a product so there's a decent chunk of money to be made at 10% if the sales person is selling other brands too. It's very feasible (if/when events pick up again) that an average sales person could sell at least 20 £100 products in less than half a day.

Its not the selling on the day so much.
Its the non selling on other days. Or low sales.

Can spend 5 days booking say 3 appointments of which one buys some stuff. Make entire income for the week including covering expenses in that one order...?
Its risky.

Some try it for a few days, get no orders and quit.

I've purchased from sales reps multiple times. New to us product its usually a sample order. Say £150 worth of stuff (I'm buying in the £2 to £10 range).
See how that goes. Maybe a bigger order next time, maybe simply replacements so a smaller order. Perhaps bigger the following year.

Plus of course those who order but then cancel. Time and effort - no income from it.

It can be done. But it is a risk and will cost you time and effort to recruit and train.

 

[Mr D]

I make the products from scratch. I buy rolls of fabric, bindings, pipings and so on and make the products to order. Also offer embroidery and vinyl personalisation.
My prices are considered high in the industry since my competitors mass produce their products in the Far East typically.

Hopefully buying cheap for the materials and using machines for the production?

 

[JMLST]

Its not the selling on the day so much.
Its the non selling on other days. Or low sales.

Can spend 5 days booking say 3 appointments of which one buys some stuff. Make entire income for the week including covering expenses in that one order...?
Its risky.

Some try it for a few days, get no orders and quit.

I've purchased from sales reps multiple times. New to us product its usually a sample order. Say £150 worth of stuff (I'm buying in the £2 to £10 range).
See how that goes. Maybe a bigger order next time, maybe simply replacements so a smaller order. Perhaps bigger the following year.

Plus of course those who order but then cancel. Time and effort - no income from it.

It can be done. But it is a risk and will cost you time and effort to recruit and train.

I'm looking at people selling direct to end users part-time at horse shows and events, not as a Monday to Friday thing selling to the trade (which I know doesn't work for me because of the margins and my suppliers not helping out). Talking to some horsey friends and customers who know the products well and talk the talk in terms of horse jargon.

 

[Mr D]

I'm looking at people selling direct to end users part-time at horse shows and events, not as a Monday to Friday thing selling to the trade (which I know doesn't work for me because of the margins and my suppliers not helping out). Talking to some horsey friends and customers who know the products well and talk the talk in terms of horse jargon.

Which means you want people to be retailers.

And you are competing for space with other suppliers who are selling at say 50% of retail price to the retailer and they are making profit from selling the item to a customer.

The retailer also has the cost of the show plus their time...

 

[JMLST]

Which means you want people to be retailers.

And you are competing for space with other suppliers who are selling at say 50% of retail price to the retailer and they are making profit from selling the item to a customer.

The retailer also has the cost of the show plus their time...

The events will have other horsey brands selling full price items to the public. I'm not aware of anyone else doing what I have in mind.

 

[Mark T Jones]

I did wonder if this was a reflection on the products being manufactured by the person who told me this.

Possibly. Or the quality of their overall offering.

Commission agents of any quality need to be motivated to sell you product - whether that is ease of sale, price, earnings or any multiple of factors.

if you jusat give them brochures and wait, you will quickly slip down their radar.

 

[JMLST]

Possibly. Or the quality of their overall offering.

Commission agents of any quality need to be motivated to sell you product - whether that is ease of sale, price, earnings or any multiple of factors.

if you jusat give them brochures and wait, you will quickly slip down their radar.

I'd expect them to have product samples and take orders based on people seeing samples. But I don't know who would pay for the samples and what the contract terms would be if the relationship would come to an end.

 

[Mark T Jones]

I'd expect them to have product samples and take orders based on people seeing samples. But I don't know who would pay for the samples and what the contract terms would be if the relationship would come to an end.

I don'yt know what the norms are. But don't kid yourself that they will automatically promote your product, it takes some good marketing & motivation to keep your product on their radar.

 

[JMLST]

I don'yt know what the norms are. But don't kid yourself that they will automatically promote your product, it takes some good marketing & motivation to keep your product on their radar.

I'm not aware of anyone else in my industry working this way so it's kind of for me to start things out.
I could handle the marketing at my end. It's a relatively small, informal thing - i'm not expecting to make millions from it but it would be great to get my products seen by more people. I'm just unsure about the contract terms and who covers which costs and how to make it fair for both sides if it doesn't work out.

 

[Mr D]

The events will have other horsey brands selling full price items to the public. I'm not aware of anyone else doing what I have in mind.

Yes - other horsey type items that the retailer purchases for a price lower than they are selling at.

Your item needs to compete in limited display area with other items so needs to generate enough profit per sale to be worth it.
Have done events where horsey retailers are present - never seen one with spare space.
So have to make it worth their while to clutter up the selling area with your item and presumably as you want orders, take time of the retail staff in doing the order instead of dealing with the people buying their products.

 

[Mr D]

I'm not aware of anyone else in my industry working this way so it's kind of for me to start things out.
I could handle the marketing at my end. It's a relatively small, informal thing - i'm not expecting to make millions from it but it would be great to get my products seen by more people. I'm just unsure about the contract terms and who covers which costs and how to make it fair for both sides if it doesn't work out.

So attend an event and have a stall. You know your product best, you aren't distracted by selling other items and you are best placed to agree to anything the customer wants or tell them it can't be done.

And sorts out any contractual arrangements because you are doing it.

 

[JMLST]

So attend an event and have a stall. You know your product best, you aren't distracted by selling other items and you are best placed to agree to anything the customer wants or tell them it can't be done.

And sorts out any contractual arrangements because you are doing it.

Alas I can't. I have a complicated set up at home that I can't leave for protracted periods - children (single mother), animals and another two home-based businesses.

 

[AllUpHere]

What are the products? Feel free to PM if you don't want to go public.

 

[JMLST]

What are the products? Feel free to PM if you don't want to go public.

Textile waterproof and hi-viz products plus some others.

 

[Mr D]

Alas I can't. I have a complicated set up at home that I can't leave for protracted periods - children (single mother), animals and another two home-based businesses.

Then you will have to compensate someone else for their time and space.
I'm thinking 60% reduction may be low.

Instead, stick the stuff on ebay, etsy and folksy. You work from home, you aren't having to pay for someone else's space and time, you don't have contractual issues and you get to sell. Or not.

 

[Financial-Modeller]

Are you suggesting that you will organise and pay for a stall at an event, which you want freelance sales people to attend on your behalf, and sell your products, or are you suggesting that a freelance sales person(s) will arrange and pay for a stall, and you will provide stock on SoR basis for them to sell?

Subtle differences in risk and reward for you and the sales people.

Also, How many events per year are there?

Five per year would provide the person / people with £1000 per year based on your 20 sales of £100 per event with 10% commission, which may deter the best people from supporting your product.

One more thing to consider, but how would you handle one of the items on display being stolen?

 

[Chris Ashdown]

Im thinking the Horse covers for head and rear end

Could you make up some flyers and post to stables, riding schools and pony club members etc telling your story, how you make them and why they should buy from you and why they are priced as they are do to the quality

Maybe offer a 6 month guarantee that if ripped then return for a free repair (turnaround normally under xx weeks), out of guarantee repairs at set price of £xx

Same if its horse blankets but maybe a shorter guarantee

Write your story and sent to the county type magazines with a few pictures, they all look out for new success stories

Look at ways to get direct to the owners and bypass the other outlets

Don't forget EBay costs 17.5% i understand but massive market

 

[Mr D]

Are you suggesting that you will organise and pay for a stall at an event, which you want freelance sales people to attend on your behalf, and sell your products, or are you suggesting that a freelance sales person(s) will arrange and pay for a stall, and you will provide stock on SoR basis for them to sell?

Subtle differences in risk and reward for you and the sales people.

Also, How many events per year are there?

Five per year would provide the person / people with £1000 per year based on your 20 sales of £100 per event with 10% commission, which may deter the best people from supporting your product.

One more thing to consider, but how would you handle one of the items on display being stolen?

There are dozens of events where such items could be sold.
Maybe even hundreds.

When events are on.

Cost of a stall ranges from £10 or so in a small event in a local area to over a grand for a weekend but a large stall you can put a half dozen staff to work at.

Bearing in mind that stuff the retailer is buying wholesale will probably have 2 or more times the price - so buying at £5 and selling at £12. Add in retailers time prepping, setting up and tearing down....

And no guarantee the stallholder will make any profit whatsoever.

 

[Mark T Jones]

Give them to existing stall-holders SOR

 

[Ray272]

Sounds interesting 3 home based biz.

Sales agents.

Focussed channels.

Would be good to learn more.

Br
Sales Agent
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