[fusion_text]Evaluation and general characteristics
We are proud to start off the English version of our blog to offer non-Spanish companies useful insights on the figure of sales agents.
Sales agents are self-employed and sell on a commission-only basis, which makes them a very useful commercial alternative for companies of any size. Now, let´s start with the basics: What is a sales (commercial) agent?
“Sales Agents” are independent professionals who earn a living out of selling someone else´s products or services. Those manufacturers or suppliers are called “Principals”; and agents sell on their behalf to purchasers of those products and services: the agent´s “Clients”.
The agent´s income comes from commissions they invoice to their Principals calculated on a percentage of the sales previously paid to the Principal by the Client.
Here´s how it looks in a graph:
Sales agents seek to create powerful synergies amongst their clients: they all usually work in the same sector, or at least purchase the same type of product or service which the agents offer. And they all are based on the same geographical area or at least as close as possible to each other so that travelling for the agent to visit them is reduced as much as possible. Overall agents will try to sell as many complementary products and services to a single client as they can. And then they move on to the next one and replicate.
The term “self-employed” is also easily understandable: the agents pay for their car, their gas, their meals and their hotels. Therefore, they are constantly balancing their expenses to keep them as low as possible so that their commissions make up for them later on.
Sales agents are not salaried employees but independent sellers. This business relationship is not ruled by labor laws (you don’t “hire” an agent) but rather specific European agency laws with important national differences. In all sales agents usually work with several companies (Principals) at the same time, forging a close, mutually fruitful partnership with them. When approaching sales agents, think of them as a B2B collaboration, you´ll be better off and you´ll avoid the big mistakes (covered in upcoming posts).
Rarely do agents dedicate all their efforts exclusively to one single Principal because not only the individual commissions may not be enough to earn a living but it also means putting all of their eggs in one basket. On the other hand be aware that Principals are important to sales agents but their Clients are even more. Keep this in mind too when you first introduce your agency to an agent: you are last in their list!
How do sales agents operate?
With some exceptions to the rule, sales agents share some common characteristics:
• Sales agents have a portfolio of around 3 to 6 agencies (called “Portfolios”). They may include products and services
• Sales agents usually have their clients within a three-hour drive from their base, which usually is their own house. This allows them to visit the furthest clients on the same day, saving them nights out. Of course, there are many exceptions to the rule depending on the density and type of clients, the sector of activity, location of the agent’s base, etc.
• Sales agents have an established network of clients that share the need to be supplied by the agent´s offer
• Sales agents work only on commission basis, a percentage of the net value of sales
• Sales agents are not importers nor distributors. They will not buy material, nor transport it, deliver it or invoice it. They only sell, which is what generates income in form of commissions. They´ll reject other tasks unless they are specifically compensated for them.
This is what you need to know from commission-only self-employed sales agents Are you ready to start collaborating with them?.