Invest and be rewarded
Jill Pullen spoke to several apparel manufacturers to find out how to locate and appoint a strong sales agent.
Making a snap decision when it comes to appointing an agent can be a costly mistake. Whilst this might sound like common sense, the harsh reality is many textile and apparel companies jeopardise their sales results by not taking the time to find the right kind of person to represent and sell their label.
Failure to appoint an experienced and knowledgable agent can end up costing a company not only a significant amount of money due to lost sales, but can also tarnish a company's image.
Evidently here are the "do's" and "don't's" when it comes to appointing a sales agent.
Increase brand awareness
For those apparel and textile companies just starting out in the industry it can be difficult finding an agent who has a genuine interst and knowledge of your product.
Heidi Vandervord, designer of women's swimwear label Cheetah, says companies in this situation should "create a hunger for their product by getting as much PR as they can so the product has a presence in the marketplace" prior to appointing an agent.
"Be proactive and establish some of your target accounts before you even consider approaching an agent. It is much easier to assign a territory if you have accounts established, plus you can set the standard of desired retailing."
Do your research
It is imperative that companies spend a significant amount of time researching not only the area they want to sell into, but the agents who are doing well in the region.
"Do your homework and only consider agents that are suited to your product and that have a proven sales record," says Vandervord.
"It's best to call your customers and find out what agents they prefer to deal with. If they are dealing with a competing company they will often recommend another agent who would be suitable for you."
Upon making a shortlist of potential agents, Vandervord recommends
calling the companies each agent represents to find out how they are performing.
Denny Collins, owner of self-titled womenswear wholesale business, says it is also important to find out how many labels each potential agent represents and how long they have represented them for.
"You must be confident that they have enough time and resources to present and sell your label," he says.
"If you find they represent 20 labels and have only two staff it is definately not acceptable," he says.
Companies looking to appoint a newly established agent must also ensure the agent has the resources to be in it for the long haul, as it can be months before they see any real income.
Evidently, Vandervords says companies must be fully aware of exactly who will be representing them, and ensure that their label is not going to be handed over to a junior.
What to pay
Upon finding an ideal agent, companies must ensure their new staff are looked after. Evidently, both parties must agree on commission percentages, job responsibilities, payment procedures and terms and conditions.
"If when appointing an agent they ask for extra commission, it wouldn't be advisable to agree on it," says Collins.
"If the agent is any good they will make sufficient profit from the normal rate of 10 per cent."
It is also recommended that companies don't try to reduce commissions or bring bring accounts established by an agent in-house.
Measure agent performance
While sales figures and market trends can give companies a good indication of how well their products and agents are performing, it often makes good business sense to have a more formal performance assessment arrangement in place in order to easily identify problem areas.
New Zealand Trade and Enterprise recommends the following:
* Request regular reports on a monthly, quarterly and annual basis. Reports should cover such things as sales, distribution and warehousing, and consumer trends;
* Encourage two-way communication so problems can be highlighted and dealt with quickly;
* Talk to customers to find out how they think their representative is performing;
* Make regular visits to the market to ascertain how quickly and accurately the agent is reporting back market trends.
:Common types of agreements
According to New Zealand Trade and Enterprise there are various forms of agreement that companies can enter into with their national or international agents:
* The "hand-shake": many companies confirm their agent's appointment and the terms of their relationship on the strength of a handshake. This approach is not recommended. If there is no written document, a company can run into difficulties in areas such as measuring performance and terminating employment.
* Heads of Agreement: otherwise known as exchange of letters. Such an agreement should include the following:
- description of your product;
- territory to be covered by the agent;
- timeframe of the agreement;
- review and termination clauses;
- performance targets.
*Formal agent agreement: requires the services of a lawyer. It is a written statement of intent that ensures everyone understands the agreement and is working to achieve the same objectives.