Know-How Exchange : Other

Depends on the agreement you have with your middle man. Are they YOUR clients or his?

If he's not performing that's one issue. If you're just looking to save the commission....you might want to rethink that. If you're not a salesperson, the learning curve is very long.

Michael

What makes you think you'll increase your profits by "doing this on our own?" Isn't it possible that it will actually cost you more to take on the sales function yourself?

It probably depends on your long-term view versus your short-term view. You'll almost certainly incur greater costs (and lower profit) short-term if you build a sales force of your own. Maybe that will prove to be a good long-term investment ... or maybe it won't.

There isn't any hard-and-fast answer to the core question. It depends on the industry, your own company's abilities and culture, the quality of the reps you're using today, and the long-term plans for your company.

Many companies are tempted to cut out the reps and "keep the profit," until they realize that it's the reps who have been generating the volume that drives their profit. Most of the time the reps earn their commissions and work hard to keep them coming in. Replacing them with in-house reps isn't a quick fix, and it could be a doorway to disaster.

Also it depends on what promotional goods you are selling, whether the middle men hold stock, how they are shipped, what the ex-factory or ex-you margin is and where your are located and where your middlemen are located.

If they are in Europe for example and you sack them to go direct, expect a law suit for the value of their last 5 years turnover as compensation which thanks to the latest bit of EEC / USA justice co-operation is enforceable in the USA. Been there and seen it done!

Answers please, then in addition to the excellent advice above we can just start to help you.


Steve Alker
Xspirt