How to Find and Choose Sales Agencies

Finding agencies is a numbers game to begin with, but choosing the right ones is what makes or breaks your income. This covers where to look, how to judge whether an agency is worth having, how many to take on, and what to pin down before you sign anything.

Where to look for agencies

By far the best place to start is the sales agent opportunities on Salesagents.uk, our sister platform, which carries hundreds of current openings from companies actively looking for agents, browsable by sector. You will also find openings in the agency opportunities area here on AgentBase. Away from the listings, trade fairs and exhibitions are still worth your time. Principals looking for agents often exhibit at them, and a conversation on a stand can open a door faster than any advert. Walk the halls in your sector, introduce yourself, and follow up afterwards. Once you are established, a good number of agencies come by word of mouth, from other agents who work for the same principals, or from principals who have heard of you. A solid reputation quietly does a lot of your prospecting for you. As you look, you will come across plenty of “get rich quick” schemes dressed up as agencies. Some are pyramid schemes, some want money from you up front. A genuine agency never asks you to buy your way in, so do not mistake these for real opportunities.

Assessing a good agency

There are no laid down criteria for a good agency. Its worth will depend on your experience and judgement, but the following points should all be addressed. With a good agency, the product:

• can be sold to your existing contacts
• is competitively priced
• is advertised
• does not conflict with another agency
• has a future
• is already selling
• is readily available
• has good descriptive literature

Not every agency will offer every one of these. If any point is missing or weak, you must decide, on balance, whether you can find a way round the difficulty without compromising what is otherwise a good potential agency.

How many agencies should you hold?

There is no hard and fast rule. New agents will find that two in the first year can be handled within his or her capabilities. With more experience the answer becomes the number of agencies you can handle while still giving each a fair proportion of your time. There are a disturbing number of agents who “collect” agencies in the hope that each will bring in some unsolicited business without any effort on the sales agent’s part. Experienced principals, who incidentally tend to offer the best agencies, are wise to such agents and will reject them.

What to look for at a first meeting

At a first meeting you should be looking for:

• a competitive product or service
• a reasonable commission
• an agreed, exclusive territory
• acceptable literature and marketing
• sales aids
• advertising and lead generation
• a degree of training
• a formal, written agreement

These are all basic needs, and your own experience will tell you what is acceptable. Beyond them, there are several points you must agree before you commit:

• how and when you will get paid
• what happens with bad debts
• what paperwork they want
• whether they will pre-notify any “house accounts”
• your limits on price negotiation
• who deals with after-sales service

Getting paid. The single most important point. Never accept a situation where you are paid your commission only once the customer has paid the principal. You will usually wait a long time, and the customer’s payment is not within your control.

Bad debts. It is quite usual for a principal to claw back commission already paid where an order turns into a bad debt. Agree jointly, at the outset, how long must pass before an unpaid order is treated as a bad debt.

Paperwork. Time spent on paperwork is non-earning time for a sales agent. It is generally accepted that a principal is entitled to a monthly report of your activity on his behalf, along with any observations on market trends and competitors’ activities, since he needs this to support you in the field. Daily or weekly reporting should be diplomatically resisted.

House accounts. A “house account” is a customer the principal has dealt with directly for a long time and on which he says no commission is due. It is vital he declares these at the outset. There is nothing worse than winning orders from a customer only for the principal to claim it as a house account and withhold your commission. If you are expected to service house accounts, that too should be paid for: it is unfair to ask an agent to service them for nothing.

Negotiation limits. Agree the limits of your authority on price, and on any other promises made on the principal’s behalf. You must know how far you can go in a negotiation without having to refer back.

After-sales servicing. This can be expensive in areas such as machinery and many others. If it is likely to arise, agree who carries it out, and at whose cost, before you sign.

Once an agency looks worth pursuing, two things follow: check the principal can deliver and pay before you commit, covered in how to check out a principal, and remember that winning the agency is a sale in itself, covered in winning an agency and agreeing your terms.