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Sales agents and distributors

Sales agents and distributionSales agents, wholesalers and other kinds of sales distributors can be a very effective channel for selling to your ultimate customers. An established sales agent or distributor can give you immediate access to your target market without the need to build your own sales presence.

A sales agent or wholesaler can also be particularly useful if you're trying to break into a new market - for example overseas - where you don't have experience and expertise.

Selling to agents and distributors

Your sales pitch needs to be based on what you can offer the sales agent or distributor.  You need to convince them that it will be worth their while representing or stocking your product (or service). Key issues include:

  • how easy it will be for the sale agent or distributor to sell your product
  • how profitable sales will be for them
  • what you can add to their business - for example, how your product fits with a wholesaler's existing range
  • what quality of service you will provide to them - for example, reliably supplying the volume and quality of product they need

The benefits your product offers to the ultimate customer are only of indirect importance - in terms of making your product easier for the sales agent or distributor to sell.

Contractual arrangements and legal obligations will be an important consideration in any agreement you reach. If you use a sales agent, you may be liable for their actions and have legal obligations towards them, particularly if you're working with self-employed agents rather than corporate sales agencies. Agreements with sales distributors must avoid falling foul of price-fixing rules.

Using your sales agents and distributors

Actively managing your agents and distributors is a vital part of getting the best results from these sales channels. Regular communication is essential, keeping them up to date with product information and selling the benefits to them of any new initiatives you want them to be involved with.

Relationship building typically includes regular visits - for example, inviting wholesalers to visit your factory, or meeting with sales agents to discuss sales plans and any concerns they have. Other kinds of support can include product training for sales agents and resellers, joint promotions with distributors and so on.

Practical logistics can have a major impact on your relationship and sales success. Sales agents and distributors soon become disenchanted with suppliers who let them and their customers down. They are entitled to expect the kind of customer service you would give to any major customer. Effective use of IT - for example, giving agents online access to product information - can be a valuable support tool.

Find more articles, videos and tools in the Resources box on the right. Or see the articles below:

You can also find more on the legal aspects of using agents and distributors on Law Donut.