Wednesday, April 10, 2013

Why You Shouldn’t Outsource Sales When Starting Your Business.

One of the most important areas to keep in mind while running your business is sales, and it’s not about my beliefs or because I just feel so, but about a very simple reason: sales is the area that brings the money in, therefore, it’s what keeps your business alive and kicking.

Without sales, your company will have very limited opportunities to survive and I’m sure you can easily understand why.

In addition to that, all businesses, including yours, were created to make money and be profitable, among other things, and you make money by selling!

Amusingly, when the time comes to develope a sales force for their companies, develop a customer base and open new markets and business opportunities, many business owners choose to hire sales representatives offering only a commision per sale instead of a salary, or sign a representation contract with an external company.

Why business owners hire independent sales representatives?

Most of the times, the reasons why you might think is a good decision to hire a commission-only salesperson, or an outside independent representative are the following:

  • You think it will help you cover more territory and grow your business faster, without having to put down a lot of money for it.
  • You don’t want to take the headache of having to manage, train and lead an "in-house" sales team.
  • You believe you don’t have the ability or the time required to create and develop an internal and effective sales force.
  • You simply want to save the money involved in having a full time, paid employee to developing your customer base.

In my professional opinion, hiring an independent sales representative is not the best option especially if your company is starting to grow.

Why I don’t think it is the best option?

As always, every time I make a reflection like this, I share with you the reasons behind it:

  • The main spot is for your product and company: Or at least, it should be. Unfortunately an independent representative has to make a living out of its work, and not receiving any money by representing and marketing your product doesn’t make it any easier thus the only way to put it all together is by adding other products to its portfolio. This means your product will not be the main one, but just another one.
  • An independent rep will push for the products which are easier to sell, rotate faster or offer a higher commission, because that’s the way it will be making money. May God permit your product is the best seller.
  • An independent rep rarely gets to have a deep and detailed knowledge of your company and product, because of the many products and companies he works with. No one can get to know your product and company better than yourself, therefore, no one can sell your product better than you or those who are as intensively committed with your company as you are.
  • It’s usually very difficult to monitor the work of independent representatives (whether individuals or firms) just because they are, well, independent. Nothing obliges them to your company or your product, so you have no way to put pressure on them to devote more or less hours to your business, to work harder or not. They go by their own rules and follow their own plans, and you either take it or leave it.
  • The goal of an independent sales representative is simply to make money, and will do so by selling any of the products it represents, regardless of which one is the best seller. Your situation is completely opposite because you need not only your products to be sold but also a customer base to be built.

No wonder it’s said that "whoever has a customer, owns a treasure" and specially in the case of business starting up or growing, it becomes a hard-as-rock true. Hiring an outside sales representative isn’t one of the most effective decisions you can make, for the reasons I’ve shared with you above.

So now, what do you think and what have you done? Have you make an effort to build up your sales team? Have you gone for the outsourcing option?

In the next post I’ll explain you why I am positive the best thing you can do for your business is to develop your own sales force.

Related posts in this blog:
Corporate reputation and sales reps’ responsibility.
Customers: Past, present and future of your business.

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