Consider all scenarios before entering independent sales
By RHONDA ABRAMS Gannett News Service
`Ever hear the one about the traveling salesman and the farmer's daughter?'
Don't let the jokes fool you. One of the most time-honored -- and popular -- ways to go into business for yourself is by becoming an independent salesperson.
The term `independent salesperson' covers a wide variety of situations -- from globe-trotting manufacturer's representatives of medical devices to homemakers earning a few extra dollars hosting Tupperware parties. There are lots of titles for salespeople -- representative, agent, distributor, etc. -- but if your job consists of persuading people to buy a product or service, you're a salesperson.
Sales presents an attractive choice for self-employment because it's a relatively easy occupation to enter. Often, it costs little or nothing to begin, you rarely need specific education or certification and a full-time, hard-working salesperson can make an excellent living.
If you choose to go into sales, you'll quickly discover many opportunities. But be cautious. Some companies make most of their money from their `distributors,' who are encouraged to buy and use the company's products, purchase samples, and pay for ongoing training. Do your homework before making a commitment or you can end up losing time and money.
When evaluating a sales opportunity, consider:
Target market.
The consumer market is tougher than the business market; there's more competition and more downward pricing pressure. Remember, consumers can always go to the store down the street or to the Internet. Even if you think you're selling a unique consumer product, you've got lots of competition. According to the Direct Selling Association, 11 million Americans sold products or services to consumers in nonstore settings in 2000.
Commissions and salaries.
Many companies provide new sales reps with a small salary or draw against commission because they recognize it's tough to build a customer base. Giving you a salary shows the company is committed to you. As you gain experience, you may prefer straight commission sales because that typically means higher commission rates than salary-plus-commission.
Training.
Choose situations where the company pays for your training or training is free. Beware of situations where you pay for your own training or training materials that may be an income source for the company, meaning they make money even if you fail. If the company isn't committed enough to you to pay for your training, are you sure you want to work for them?
Protected territory.
Who wants competition? Especially when you're first starting, look for opportunities where you're the company's exclusive representative for a sufficient-sized territory.
Competition.
Similarly, look for products or services that have few competitors in their category. You'll have fewer competitors if you sell industrial machines than if you sell nutritional supplements.
Leads.
Does the company provide `hot' leads for you; in other words, do they have accounts for you to go after or do you have to build your customer base from scratch?
Samples. While having to purchase samples is not uncommon, you shouldn't have to spend more than minimal amounts, especially at the beginning. Preferably, the company should provide samples free.
Marketing materials and programs.
Once again, look for companies that provide you with marketing and sales materials free. The more support you get from the head office, the lower your overhead.
Noncompete.
Many companies won't allow you to represent competitors' products at the same time. This isn't unreasonable if the company is making a substantial commitment to you (paid training, protected territory, etc). Be cautious of situations where you can't compete against the company but the company can get lots of sales reps to compete against you.
Company.
Make certain you're working for a highly reputable, stable company. Check them out thoroughly. Ask to talk to sales reps who have left the company. Check with the Better Business Bureau, surf the Internet to find comments, lawsuits, etc. about them.
Most importantly, don't rush into anything. There's always demand for people who are willing to make sales and are good at it. So don't commit to any product or company until you've looked around.
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