To distribute a product, you first have to make sales. Many entrepreneurial companies are unable to field a large sales force, so they enhance their efforts by using independent sales representatives who will sell their products, along with those of other businesses, for a contracted commission. If you consider contracting with an independent sales rep, this checklist will help you evaluate each rep you are considering.
Does the rep carry conflicting or competing lines? What the rep's commission structure? Where is the showroom, if any? How about the warehouse? What is the geographical area covered? Who is the rep's key account? What is the number of salespeople? How many years has the rep been in business? What type of promotional support is offered? How willing is the rep to submit sales-call reports? How frequent are the rep's trade-show appearances? What is the rep's specialty? Has the rep listed all markets covered? Can the rep personally interview field sales reps? Does the rep really know the customer? Can the rep provide a termination agreement? When are commissions paid? When are overdue accounts collected? What deductions does the rep make for credit losses? What rights does the rep have as far as credit rejection is concerned? What catalogs or other materials are required? Can you appear at sales meetings, to see how things go? Will reps buy samples at deep discounts? Does the rep warehouse any inventory? Can the rep supply a current list of references?