Independent Sales Rep Hiring and Management | Hire Top Talent

Hiring independent sales reps is a great option that many companies and sales managers are going with for a variety of different reasons. Some are either hiring them as their sole sales force and some are using this component as a way to expand their sales department using a hybrid of independent contractors and full time sales people.

There are great benefits for companies to go this route and there are some unique challenges as well. There are usually considerably less monetary risks involved.  You must use a different method of hiring and managing them and sometimes it can be a challenge.  But if a company is able to manage the challenges, the rewards can be exceedingly great.

Sometimes they are called manufacturers representatives because this category of sales reps first began in the manufacturing sector. They are sales agents who are independent contractors instead of full time employees in your company.

Although they may represent your company and your line of products and services, it may be just one among many others in their sales portfolio. Instead of filling out a W-2 form like your other employees, you would give them a 1099 form to fill out instead.

The greatest benefit for this option is that it reduces financial risk for the company dramatically. Most reps are hired as commission only, which means you pay them only when they make a sale and bring in the money.

The only risk or investment that is incurred is the upfront cost of finding, recruiting and training these sales people. The ongoing investment is merely managing them, but this can be cut down considerably when you consider that you won't be investing time in someone who is not producing.

Because this is usually a commission only scenario, it makes the reps more motivated to close deals as well as collect the money once the service or product has been rendered. So you get a sales guy and a collections guy all in one.

In addition, there is also a great advantage in the amount of time you would invest in an independent sales rep than a full time employee. It comes from the sames principle as earlier. If someone is one commission only, they will figure out how to do this themselves and will motivate themselves. And that means you won't be the one having to do those things.

Challenges

There are some unique challenges that come with working with independent sales reps that you wouldn't have to deal with using the traditional full time sales guy.

First of all, good reps are hard to find, especially one that's in your industry. The ideal rep will already have a client base in your target market. You have to find one where your products and services are complementary to the lines they are already selling. Or, you must convince them that your line is better and to ditch your competition's lines. Both of these things are extremely difficult to do.

If you do decide to hire someone without an existing client base or industry contacts and experience, then you have to train them and bring them up to speed on what's going on. This can take some time and effort on your part and at the end of it all, they might not stick around.

Which brings me to the next problem, retention and turn over. Because these situations are generally commission only, many reps find other companies that may have higher commissions or an easier market to work for. That makes doing this very competitive and you have to offer a good commission package.

Managing independent sales reps is very different from managing a traditional sales force. Here are some tips that could help.

Before you invest any time and resources into training a new rep, make sure you get a commitment of how much work they will do for you. The measurement of this work is up to you depending on your sales model.

For example, you can ask for a commitment of a minimum of 50 sales calls a day, or 1 closed deal a week, or whatever else that you might deem effective. But always get that commitment and keep daily track of how they are doing. Don't train then forget about them. That's a great way to lose a rep. Stay on top of them to see where they are at and if they decide to not work for you anymore, at least you'll know.

Salesforce.com

A great way to keep track of your reps is to use Salesforce CRM system. It's a client relationship manager that allows you to create an online database and pipeline of sales leads. It had some great tools for you to analyze and track how your reps are doing on their calls. You can give each of them a unique user account, populate their database with leads, and track them individually.

Lead Reporting

If you aren't going to provide leads for a rep, you still need a way to keep track of leads and prospects so you and your other reps don't overlap. So you still need to keep a lead database. You can have them load their Salesforce account as they contact leads, or you can just have them email you the leads once they have started a relationship with them. That way, not only are you keeping track of the leads, but you are also keeping track of your reps work.

Paperwork

Once you decide to hire a rep, you must have them compete a 1099, which is the IRS independent contract tax form. You can have them fill it out, fax it to you so they can get started working right away and have them mail you the original.

In addition, you might want to seriously consider having them sign a non-disclosure agreement and/or a non-compete agreement. A non-disclosure agreement will restrict them from disclosing any trade or industry secrets to competitors or the market. You don't want your contractor selling your secrets, your strategy or any inside information to your competition.

A non-compete agreement will restrict them from competing with you, whether it's in the form of them starting their own business that competes with yours or working for your competitor.

These agreements generally have time limits depending on what you negotiate. 5 years seems to be sufficient for many companies. In 5 years, it is unlikely that anything they learned while at your company is still a secret or worth anything anymore, especially with the current pace of change.

Finally, you will want them to sign a contractor agreement. This will lay out the basics of your working agreement such as a detailed commission structure, payout schedule and contract termination procedures. The details of this agreement will be different based on your company's requirements.

For more information on sales as a career and detailed information about independent sales rep jobs, you can go to the US Bureau of Labor Statistics.  It's a US Federal Government website with tons of great information and data on jobs in the US.  It includes salary and income information as well as jobs data that tell you how many jobs for certain fields there currently are and if and how fast or slow they are growing.  It's a great resource for anyone interested in learning more about these jobs.