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Hiring Sales Agents and Export Representatives

Last Issue, Thomas Smith’s article covering the career opportunities as an Export Sales Representative, touched on an area I am particularly passionate about. 

As such I have prepared this article building on his but giving the perspective of an exporter or manufacturer who seeks to hire such an export sales representative and to explore the criteria I have used in the past when dealing with this important area.
Hiring a Sales Agent or Export Representative, like any other HR decision, is not something to be taken lightly as your chosen candidate will essentially be the face of your company in your target market.

I have been the owner/CEO, of a multinational operation. I developed the company from a ‘national’ (well actually based in The Netherlands and Germany) to a multinational business. My operation had three manufacturing plants and, in the end, eleven marketing companies located in many parts of the world, including China (Beijing and Hong Kong), Japan, USA, and most European Countries. My Headquarters were in Germany with two production plants and four or five marketing branches in Germany itself. In Europe I established my own marketing offices in those markets where I saw business potential.

Simple but Pragmatic Strategy My strategy was simple yet pragmatic – I sought out an individual with a strong marketing and management background in the target country and offered him or her to become the future Managing Director of the new marketing operation that they had to build for me, and off we went. This way my costs were low and I had extremely motivated people to work for me that were prepared to invest their working life in building “their” company.

This (European) strategy also gave me the best form of control over what my sales people were doing for me. Before, I had agents and it was difficult to maintain them and to control what and how much they were doing for my business – a common issue when dealing with agents as you will see later.
Most of my European Companies therefore became a great success and in the end I was employing close to a hundred sales engineers and had a staff in total of 330 employees. I repeated the same strategy in several overseas markets such as the US, China and Japan. In the “rest” of the world, and in areas where we needed even greater engagement with the market due to the sheer size of the market it could not be covered by Branch Office Staff on their own (USA for instance); we worked with agents and distributors in addition to our own Branches. In 1990 I sold my business to a major multinational. My business at that time had a net worth of $150 million
Sales Agents

Since the sale of my company I have consulted for many manufacturers and exporters and have assisted them in introducing their products or services to the market place. I have also been involved in reorganizing many company’s sales structures. I always had the belief that the sales force was the key element that could pull any company through any difficult economic time. Sales, therefore was always my prime focus when working in any organization. I have often been involved in finding good international representation for clients because I still had a good personal network of contacts.

Pareto’s Law for Export Sales Agent Recruitment
In general terms, less than 20% of sales agents are successful. This 
is “normal” and apparently an industry average. 80% of the agents were unsuccessful and eventually have to be replaced. This is a continuous and very labor intensive process. The cost of recruiting, retraining the new agents, salespeople, the sales lost and the customers lost and market share lost to competing lines can be astronomical.

Why does this happen? First of all, some business people think they are the only manufacturer/exporter in the world. Fact is, there are millions, all wanting to sell their “unique” line of products. Fact is too; that in an ideal world the manufacturer/exporter wants to employ someone by paying them only after a fully paid sale has taken place hence the popularity of sales or commercial agents. Many times the case may be that the sales agent isn’t convinced that they have the best product in the form of your product. The sales agent has to personally “invest” first in selling your product without having earned a cent yet. So they have little or no other choice than to try to sell your product and, yes, mostly on an opportunistic basis.

The problem is, the sales agent will naturally focus on products they know they can sell. Another limiting factor is the number of product lines being handled by the sales agent. 12-15 product lines should be any agent’s limit. A typical sales agent will earn most of their income from 20% of their entire 
portfolio; the remainder of the portfolio is trial, error and opportunistic. Chances are considerable that you are in the other “remaining” section of the agent’s portfolio. 

That’s not an optimum solution. This is why finding, recruiting and appointing sales agents is an art and a highly skilled task. Assuming we have found the best agent for our purposes, the most difficult part still remains after the Agent has been appointed: MANAGEMENT. This is true with both independent/self-employed agents or employed sales staff. Interviewing a sales agent is a task which not only needs to determine how good a sales professional they are, but to a greater extent, we need to look at how they are running their business. 

That includes looking at the product lines they currently sell in detail and identify which ones could match with your products, rather than compete with them. 
An exporter or manufacturer needs to make sure that the sales agent is not just trying to get more product lines with the premise that the more lines they carry, the more chance of selling ‘something’. That’s why a focused and well structured product line portfolio which complements or synergises with our own product lines is an essential ingredient when choosing a sales agent.

Key Criteria
Among other items of data I like to collect on potential export sales agents, of course as mentioned, their product lines, their management style, their successes rate, which product lines are under performing and why from the perspective of the export sales agent. The fact of the matter is that, when we go in search of a good export sales agent, the best of the bunch will be difficult to find because they are already on the road selling. Those that are sitting at home randomly applying to represent your, or someone else’s product line is likely the wrong agent to work with. This is where the criteria and suggestions above can assist in your search for the right person for your company.

Online Resources
One of my own personal initiatives in assisting manufacturers in finding agents has been to set up an international trade directory at www.export-trading.com. Its focus is as a location where Manufacturers can be found by potential buyers. For the more proactive among you a website athttp://www.exportid.com provides an online directory of specialised export agents seeking principals. 

Remember to take into account the points in this article when evaluating potential export sales agents for your company and you will be well on your way to being in the top 20% of successful product lines offered by your future sales agent!

Gerhard Korver Looking for export markets, new products, sales agents,
manufacturing agents, buying agents world-wide?

You can post your products, services, or search for distributors and sales representatives (free) atwww.exporttrading.com
Email: info@export-trading.com
Other Web Sites: www.freeexportdirectory.com

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