Seller's Market

Building Momentum

Once you have a commission sales agreement in place, here's how to make the most of the relationship:

  • Act big: One of the reasons to go with a manufacturer or distributor is to use their size to build credibility. Have your business card state the company's name; always mention the company's name when you call; and be sure to have first-class brochures, marketing materials and trade show booths that clearly call out the company's name.
  • Set up distribution: There will usually be plenty of sales opportunities for a product other than the big accounts you use to land your agreement. Your goal is to continue to increase the product's sales, which you can do by hiring manufacturers' sales agents to cover the country by adding distribution in new markets. You have to pay the new representatives a commission, but you will still receive your override commission.
  • Hire other salespeople: Your long-term goal is to keep producing new products. You can't do that if you have to handle all the sales on your own. Work with the company to hire new salespeople, accepting the fact that your only pay is your override. This boosts sales and allows you to branch out into new products.

Building a Business
Once you have a sales relationship, you can continue introducing products through that manufacturer or strike out on your own. If the latter is appealing, take these steps to prepare:

  • Hone your skills: Your long-term success in commission sales depends either on your expertise at introducing a product or on your creativity in continually coming up with new product ideas. Both of these skills are ideal building blocks for going into business for yourself. You may not be able to reclaim your original product, but you can move on to introduce a new product of your own or even products from other inventors.
  • Create an industry presence: Become known in your industry by being on industry committees, volunteering for associations and serving on committees. You can also write articles for trade magazines, give speeches or presentations, and volunteer to help with training meetings.
  • Take control: There is an inevitable clash when you sell your product on a commission basis for a company. You want to develop a network of contacts that helps you increase sales, makes you important to manufacturers, and sets the stage for future sales growth. The manufacturer, on the other hand, feels vulnerable if it doesn't have direct contact with customers and the distribution channel. The best strategy is to introduce buyers and distribution channel contacts to the manufacturer when starting out, then cut back the manufacturer's involvement as sales develop.
To find the key players in your industry, check out Gale's Encyclopedia of Publications and Broadcast Media, Gale's Source of Associations, and various trade show directories available at larger libraries. You can also contact the writers of articles in trade magazines and ask them who the key players are in a business. Often these authors are industry people who will provide you with names and may even tell you who the best candidates are to buy your product.

Adapted from Think Big: Nine Ways to Make Millions From Your Ideas (Entrepreneur Press). Don Debelak is president of DSD Marketing, an inventor assistance firm. He has helped introduce more than 100 products in his 20 years of new-product experience.

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This article was originally published in the February 2003 print edition of Entrepreneur's StartUps with the headline: Seller's Market.

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