Question

Topic: Other

Targeted Sales Rep Or Territory Sales Rep Retail?

Posted by Anonymous on 3/19/2008 at 4:32 PM ET 250 Points
We are a wholesale designer/manufacturer in the baby gift sector who wants to start into a relationship with sales reps. We are trying to decide if having a targeted rep for specific stores or a regional rep is the best way to go. Or if a combination is best. We have an e-commerce component too so we ar concerned that a regional rep will want commission on our sales based on zip code, including our e-commerce which will be difficult if not impossible to track to the efforts of the sales rep. What are others doing?

We also want to decide if it's best to participate in shows by using our own booth, renting from a permanent booth, or having the sales rep group handle it. What do you think?

Thanks!
Julie
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RESPONSES

  • Posted on 3/19/2008 at 4:53 PM Accepted
    More details needed on how are you planning to divide sales territory and what does it mean by "specific stores"?

    From what I understood the question is whether you should have sales division by geography or by specialty?

    Most of the sales reps I know (and I know a lot) prefer to work geographically (assuming that territory is fairly divided). This allows a sales rep to concentrate his or her efforts and farm the business. When the territory is non existent or too broad it is really easy to be all over the place. Also, owning a territory assures sales rep that he or she can work hard, develop it and have unlimited income potential, without someone suddenly stealing his or her sales.

    In regards to online component - you should have a dedicated sales rep for that as well, so your regular guys know that they have no share in internet business. Unless, they can prove that they have been working on the account for a long time and for some reason the order came through other medium.

    Bottom line - geography that is clever divided is preferable by most of the sales reps.


  • Posted on 3/19/2008 at 5:31 PM Accepted
    As a product rep for the direct marketing industry, here is what I find most people are doing.

    They have retail, (Brick and Mortar) reps; if it's sold out of building, they cover it. They work by territory, usually by state. Some territories can cover multiple states.

    Then they have a separate direct marketing rep that works on companies that sell at a distance, i.e. catalogs, home shopping television and infomercials, mail order advertisers, direct mailers, web merchants.
  • Posted on 3/21/2008 at 8:52 AM Author
    Hi Again,
    Thanks for both you reponses.

    What I mean by specific stores is that if I want to hire a rep just to get me into say, Target or Nordstrom, will they work that way?
    I am open to how I divide up territory - I just think we need help covering the opportunities. I just don't want to give the reps commissions on our existing customers, or on our ecommerce sales which are extensive. I want to focus the reps on brick & mortar accounts we haven't called on or gotten into.
    We sell in both brick and mortar as well as internet. We've got the internet figured out with our own internal experts. It's the brick/mortar we need assistance with.

    thanks!
  • Posted on 3/21/2008 at 9:04 AM Member
    In consumer electronics (my expertise), most territories are geographic, based upon time-honored borders. That works best for the 80% of the accounts (by count) out there -- small- and medium-sized companies that you often don't know about. Reps are compensated on performance, so there's a great alignment between their performance and yours.

    The remaining 20% - major accounts -- might be as much as 33% of your sales volume. These would be the large, national accounts that require sustained marketing efforts that take months and require selling to multiple people sometimes across territory boundaries. These key accounts are best handled by a separate team, mostly likely an in-house person, who'll be compensated differently.

    Most reps will gripe about lost commissions on e-commerce, but realistically that is the same gripe heard from the bricks 'n mortar retailers. They need to grow up. You can and should specifically exclude on-line sales in any rep agreement since the rep is focused on store-front sales.

    However, for the same reasons as key accounts, you might target large on-line resellers with a dedicated force -- again, in-house or contract players. These resellers have truly different needs/concerns and a different decision cycle.

    Be sure you choose a rep contract that gives you maximum flexibility to get rid of reps that are not performing. Most agreements I've seen have a 30-day termination clause with 'no-cause'. Others simply expire on December 31 of the year in which the contract was signed. You should obviously give a good rep sufficient time to learn the product, build up the territory and achieve results. However, if things don't work out, you should not be stuck in a failed marriage.



  • Posted on 3/27/2008 at 8:46 AM Author
    Thank you - your responses were very helpful!! Julie
  • Posted on 3/27/2008 at 8:50 AM Author
    Hi, I tried to accept David's answer but the site timed out, then I got an error message saying the question was closed. If it helps David to get credit, I was trying to accept the answer if you can help. Thanks Julie
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