What makes it difficult to find a sales rep?

For many small and medium size companies, having several commission only sales reps appears to be cost-effective and a low risk marketing strategy to boost your sales. However maybe it is a law of nature that low risk always comes with low efficiency. My experience is that it is very difficult to find a good, experienced, aggressive sales rep. I would like to share my experience here for those who have not started doing so.

After about 2 months of study, we implemented the following idea in early 2010. In February 2010 we paid for a one year subscription (about $1000) to a rep hunting website. This website claimed to have over 10,000 sales reps in their database who were searching for and interested in taking on new lines. In the past 11 months we have contacted over 100 reps by email and telephone. Having made contact with 40, with the average call time of 20 minutes and 3 phone calls having been made to each of these 40 sales reps, the total time spent was more than 40 hours!

Our total time spent searching and contacting reps was actually more than 1 month with a success rate so far of — 0!!! I believe it would have been more productive if we had spent the same amount of time doing the sales ourselves.

Here is my analysis of our failure to find and employ a rep:

To successfully establish sales channels, considerable time and effort must be invested by the rep at the beginning of the sales cycle. If there is not a retainer (stipend or basic salary) offered, most sales reps are reluctant to invest their time in such an effort. For those reps whose current lines are not closely related to yours, the chance is slim unless a rep is desperately searching new lines.

In reality, your chances are best with those people whose current business is more relevant to yours. It simply is easier for them to present you to their current customer. However you better pray your line doesn’t conflict with theirs. If it does they will not be able to take yours, legally or morally.

Finally you do come across a few sales reps who appear to be a match with your business. However, this strange problem always seems to arise: you don’t hear anything from them for a long period of time and/or they just disappear after the first few contacts. The explanation can only be that they are either too busy or simply not ambitious enough to promote additional products. Sales people are usually well paid already. So there must be a compelling reason for them to change or add a new product line.

Finding sales reps appears to be a numbers game. When you reach the 3rd step above there will only be a few candidates left. And there is no real assurance that these reps will be productive.

I guess to be successful, you need to find the right channel so interested sales people can get to know who you are, what you do and how working with you is in their best interest. I would very much like to hear people’s suggestions. You may contact us through email. Chosen answers will be posted here.

Risks to consider to offshore manufacturing

Usually there are 3 options to meet the manufacturing needs for a company: manufacture in house, outsource inshore, or outsource offshore. Appearantly option 3 offers the greatest cost savings however combines with the highest risk. If not handled properly this could lead to chaos in your core business operation.

Low efficiency in communication -

You can not always fly several thousand miles to meet your supplier, you can’t discuss technical issues with them face to face, which is the easiest and most efficient way of communication. The drawing itself may not contain all requirements needed to optimize the part’s functionability, thus a possibility exists, that is a part fully conformed to the drawing may not work so well or not work at all. To avoid this, you must spend more time to document all technical requirements either on the drawings or by other means like photos, explain how the part will function and/or what items need to be paid top attention to.

Losing some control over the manufacturing –

Unauthorized changes on technical specs or materials, workmanship not being strictly followed, these will eventually damage your brand value. Many times you are not the major customer and some of your requirements will not be answered. To minimize the negative influence of this, you need to carefully select suppliers who are keen to work for you, and clearly define your expectation for quality requirements.

A lack of stability in business relationships -

It could deteriorate to the point that it can no longer last, but this doesn’t happen overnight. Having an evaluation system in place to check if there is any sign of deterioration, having multiple choices and sometimes keeping an inshore supplier will always help. 

Project time frame not predictable –

More often than not, it will take longer than you initially expect to get production up to speed. Having a professional supplier who has more experience in your particular job, assigning someone to monitor plans and progresses on site, avoiding unnecessary waiting during processes will always shorten the time frame.

Unexpected quality issues or delivery delays -

Sometimes the causes are unpredictable, for example, China always have limits on powder supply which can not be foreseen several months in advance. Scheduling longer lead times, the extra cost will be well offset by the savings.

Unauthorized usage of your intellectual property (IP)-

Entering a NDA contract will be helpful but its protection is limited. To better protect your IP, you also need to seperate your outsourced parts into groups. Different component groups should be sent to different suppliers, keep them farther away from your core knowledge. Most factories will not violate your IP due to their marketing and financial capabilities, and it is rare that they disclose your IP to other companies.

Other things you need to consider are: Import/export taxes and duties, shipment arrangement, language / time zone differences, etc., but they are minor to these concerns listed above.

You may find most concerns about outsourcing to an offshore supplier are similar to those of a local one, but I believe they are quite different in nature due to huge gaps in culture, language, professionalism, and business ethics. I will discuss more about them in future blogs. The more sophisticated your outsourced projects are, the more prepared you need to be for those differences.

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