Before you commit, it is worth being honest with yourself about four things: whether you have the temperament, whether your age or health is really the obstacle you might fear, what you could actually earn, and whether you can live with the risk. Take them in turn.
Do you have the temperament?
The first and most important requirement is some sales experience. Trying to cope with the inevitable mistakes of learning to sell while also earning a living purely on what you sell is very hard going. Companies can afford to take on inexperienced salespeople and train them because they carry the cost while that person learns. As an agent, you carry it yourself. If you can already sell, you are starting from the right place. Beyond that, three qualities matter.
Self-discipline, because it is your time and money
Nobody is going to chase you. It is easy to find reasons to stay at home on paperwork instead of getting out in front of customers, and that way lies trouble. Be prepared to:
- put your time with customers first
- keep on top of the admin, but do not hide in it
- motivate yourself and set your own targets
- not turn a cold into flu
Resilience, because the knocks come
Persistence and tenacity are essential, especially while you are building up. Setbacks arrive in different forms, a principal failing, the loss of a big order or a good customer, and when they do you cannot blame anyone else and still draw a salary. You have to go out and replace that income, with a smile on your face. Most setbacks come early on. Experience teaches you to avoid the common ones, but they never disappear entirely.
Comfort working on your own
For some people the biggest adjustment is not having colleagues around to talk things over with. You will, to a degree, become a loner, though as any established agent will tell you it is not a lonely life once you are out among your customers. Making decisions by yourself becomes second nature. You will get some right and some wrong, but they are yours. One piece of timing advice. If you are relying on redundancy money or savings to see you through the lean first months, decide while that cushion still has something left in it. The need to earn, and earn immediately, makes salespeople desperate, and desperation shows. A sales agent needs a little time to build a customer’s confidence across a range of products, and that patience is usually what produces the bigger sales in the end.
Am I too old, or not fit enough?
The selling profession has no age barriers, so becoming a sales agent follows the same rule. If anything it has a further advantage: agents often carry on to a ripe old age. A salaried employer sometimes prefers younger salespeople because he can mould them to his liking and they probably come cheaper or work faster, but a principal is not paying you for how many calls you put in or how hard you work. He is paying you for the orders you bring in, and it matters not to him whether you are 20 or 90 years old, he still pays the same commission. Many agents carry on working for years after the normal retirement age even when they do not need the money, cutting down the number of agencies held or the distances travelled, because it is a way of life they cannot completely give up. Sometimes it is the lack of a decent pension that prompts them to carry on. Obviously the fitter you are the better you will be able to carry out your major function, contacting customers and obtaining orders. Nevertheless there are many agents who are successful despite medical problems that would probably deter their employment as a paid salesman. Do tell any prospective principal of your condition and how you aim to get round it from the outset. If you can demonstrate a positive attitude towards your disorder and show him that your sales will not be affected overall, it should not go against you. They will respect your frankness.
CASE STUDY
Take Charles, 52, made redundant for the third time in a decade, none of it his doing. He is an experienced sales manager who presents well, but the handful of interviews he has landed, often with people half his age, have gone nowhere, and he is starting to think his age is the problem. For an employer weighing salary and fit, perhaps it is. For a principal who only pays when Charles delivers orders, his age is irrelevant and his thirty years of contacts are an asset. The very thing counting against him in the job market counts for nothing against him as an agent.
What could I actually earn?
Start by finding out the going commission rate in the area you know. Rates vary enormously, but the pattern is consistent: easy, quick, repeat business pays a lower rate, while one-off, high-value or long-lead sales pay much more, because each one takes longer to win and you carry more risk of losing it. Across the board it averages out at around 10%. A rough worked example. Suppose that, once established, you could realistically write £400,000 of orders a year in your patch at an average 10% commission. That is £40,000 in commission. Take off, say, £10,000 of running costs, vehicle, fuel, phone and insurance, and you are left with about £30,000 before tax. Now look at the two ends of the scale on the same effort: fast-moving repeat goods at 5% turn that £400,000 into £20,000, while high-value or service sales at 25% could pay £50,000 on just £200,000 of orders. It is the commission rate and the type of selling, as much as the headline turnover, that decide what you take home. Those figures are only an illustration; your own will depend entirely on your market. In practice it is easier to work backwards. Estimate your monthly running costs, add the minimum you need to live on, and that tells you the sales you need to cover at your expected commission rate. Just remember that your first month’s income will most likely be nil and build from there, so set yourself early targets and do not expect a profit in the first few months. The fuller picture on budgeting, costs and tax is in our guide to setting up as a sales agent.
Can you live with the risk?
This is a real business, and real businesses carry risk. The single biggest one is straightforward: a principal’s business fails owing you a lot of commission. The way to blunt it is the way insurers manage risk, by spreading it. Most agents represent several non-competing companies, sometimes across different market areas, so that if one agency disappoints there are others to fall back on. The trap to avoid is the single-agency lure. It is tempting to pour everything into one agency whose product sells easily, but that leaves you exposed:
- a company’s policy towards agents can change overnight
- an easy agency today can be taken in-house tomorrow, once you have built the sales up
- one uncompetitive spell from that principal and your income stops
A sound approach is to spread your agencies across short, medium and long-term sales, so a quiet patch in one is covered by another. Most reasonable principals accept that you work for others too. Few could expect you to live off their product alone, and knowing you hold a balanced portfolio is part of why you will stick with them when things get temporarily hard. How many agencies to hold, and how to judge a good one, is covered in our guide to finding and choosing agencies. One reassurance worth knowing before you start. If a principal ends a productive agency you have built up, the Commercial Agents Regulations may entitle you to compensation or indemnity for that lost business. It does not remove the risk, but it is a backstop an employed salesperson never has.
Further Resources
This article is adapted from Become a Freelance Sales Agent in the UK by Terry James. Join Salesagents.uk to download the complete book it draws on, get a promoted agent profile, and have our head-hunting team find and introduce relevant opportunities to you directly: join Salesagents.uk.
Decided it is for you? A Sales Agent’s Guide to Success takes you from setting up to winning agencies and negotiating your terms.