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Selecting agents and distributors checklist

Selecting and Managing Agent and Distributors Checklist

Definition of a Distributor: Distributors buy products from you and sell them to their customers

Definition of an Agent: Agents negotiate sales on your behalf and earn a commission. Your product is shipped directly to the customer who pays you

The key to widening your customer base successfully lies with finding the right people to work with you in the marketplace. Developing a clear idea of who you are looking for gives you the best chance of success. When selecting a new distributor/ agent, it is essential that you establish answers to the following questions.

Key Company Facts:

  • When was your company established?

  • What is your turnover?

  • How many staff do you have?

  • What office/ storage/ distribution facilities do you have?

Territory

  • What geographical area do you cover?

  • How do sales break down by area i.e. best performing areas?

Sales

  • How many active customer accounts do you have?

  • How many of these are well performing ‘decent’ accounts?

  • How many of these accounts hold potential for my product?

  • How many trade as opposed to retail accounts?

  • How many sales representatives do you have covering the area?

  • How does your sales operation work e.g. do you have a telesales drive every month?

  • What is your share of the market e.g. what share of the sales of bottled water to London restaurants do they have?

  • Will I be able to have direct contact with your sales staff?

  • How many principals do you already work for?

Products

  • What products do you represent?

  • Do you sell any of my competitor’s products?

  • Which products are your best performers?

  • Do you see an opportunity for your business with my product range?

PR

  • How do you promote your company?

  • Can I see examples of your advertising/ PR campaigns and/ or mailings?

  • Which exhibitions do you attend?

Support

  • What back-up/ technical services are offered?

  • Will you be willing to invest in promoting my product e.g. product literature?

  • What PR support do you currently offer to your principals?

  • Are you willing to have joint stands at exhibitions?

  • Do you deal with complaints/ faulty goods?

  • Can you provide monthly sales depletions accounts to me?

Market Knowledge

  • Who are my competitors in your marketplace?

  • What benefits do they offer? What are their prices?

Future Aspirations

  • Where do you see your business going?

  • What kind of growth are you projecting?

  • What could you achieve with my product?

  • What makes you think that this is realistically achievable?

Financial & References

  • What payment terms do you offer your customers?

  • Who are your bankers? (Name and Address for reference)

  • Can you give me two trade references?

Remember

The agent or distributor will be representing your product in the marketplace. You are not in control of the sales process – therefore you need to ensure that they have the skills, experience and relevant knowledge to best represent you.

It is essential that the relationship with your agent/ distributor is seen as a two way process however. The following are examples of ways you can support your distributor:

Contact

  • Invite them to your factory for a tour and introduction to all the staff.

  • Visiting them on a regular basis to ensure that business is developing effectively e.g. once every two months.

  • Maintaining weekly telephone contact

Promotions & Incentives

  • Sales promotion (if necessary) e.g. Buy Ten Cases, Get one Free deal.

  • Point of Sale incentives e.g. If the distributor reaches a target of £x sales, they receive point of sale material to assist their sales e.g. branded hats, pens, posters, sweatshirts, fridges etc.

  • For best performing distributors, a bonus gift could be offered e.g. All expenses paid Golf Day, Trip to the theatre etc.

PR and Marketing

  • Keeping them informed of all company developments by sending them company newsletters and copies of all press releases/ mailings. (Involve your agent/ distributor in the creation of newsletters and web-sites – get them to provide information on new customers enabling you to create case studies)

  • Ensuring the distributor has copies of all product photography and specifications.

The Agreement

Once you have selected your agent/ distributor, you will need to set targets and create a contract confirming the needs and requirements of both you the Principal and the Intermediary. Here are a few of the main items to be agreed and established in your contract.

  • Agent/ Distributor will undertake a trial period of 6 months, after which sales will be reviewed.

  • Hereafter, both parties will be required to give x months notice before termination of contract.

  • Geographical Area to be covered by agent/ distributor e.g. London

  • Exclusive or non-exclusive basis (If you give your agent/ distributor exclusivity, you are agreeing that no other agent/ distributor will be allowed to sell your product in the agreed geographical area. You will not be allowed to make direct sales either).

  • Agent/ Distributor to represent x products/ whole range

  • Agent/ Distributor agrees to target specific types of outlet: delis, cafes, restaurants, hotels and catering companies.

  • X number of number of new customer accounts to be secured in 12 Months

  • The principal agrees to offer x sales incentives to the agent/ distributor e.g. 10 plus 1 incentive

  • X amount of volume to be sold within next 12 months.

  • Agent/ Distributor to provide Sales and Depletions reports on a monthly basis – by email to ………. (named contact at company)

  • Agent/ Distributor to place x items of agreed advertising each year. Graphics to be signed off by Principal first.

  • Agent/ Distributor to provide information on competitors progress within the geographical area of representation.

  • Agent/ Distributor to include Principal’s products in all relevant promotional literature and promote as and when necessary with relevant PR – in line with Principals PR programme.

  • Agent/ Distributor to include Principals product in x amount of telesales drives during next 12 months.

  • Agent/ Distributors performance to be reviewed every 12 months.

To maintain a successful relationship with your intermediaries, see Reviewing Your Agent/ Distributors Performace Checklist

Next Steps