When we hear the term business, we get the thoughts of products in a wide range, profit, money and most importantly we remember the sales representatives. It is obvious that without representatives representing your product, there would be no one to buy it. Hence, companies spend their time to hire these representatives to make sure their company gets the progress it aims for. It is important for the company hiring these representatives whether they happen to be a manufacturers representative or a sales rep to consider a contract before the hiring process is done.
Purpose and contents
The sales representative contract is basically present to create protection of both the manufacturer rep as well as the principal. It's just a set of clauses that should be present to govern the relationship between the representative and the company. Verbal agreements made causes disputes and untrustworthy practices by both the parties. In general terms, it has always been recommended to have independent sales representatives for smaller companies due to the fact that they can both build and improve the business together. In the manufacturer’s representative contract, it is a legal contract between the company and the person who is hired to sell the product.
Sales representation agreement checklist
A sales representative is vital for business growth. Before signing an agreement, individual goals are discussed and to conclude as to whether it’s enough for the company’s progress. Both the parties should agree to a point and the agreement should be in brief so that all the parties are able to understand it clearly. Everyone must sign his or her copy for future reference.
Common mistakes in manufacturers representative contract
There are many factors which come into play in the creation of an agreement. There are certain things which need to be kept in mind, especially during the time of agreement as it is a big task. Making one mistake in it can cause a disruption to the business itself. While discussing or going through an agreement, there are certain mistakes that the hirer will make during the time of the contract. Some of them include:
- Don’t forget to qualify: the first thing to do is to qualify the potential customer. A large amount of time will be wasted on customers who don’t need or afford the offerings you present.
- It’s important to not have all the answers to the questions as a yes. There are certain times you need to say a no and stick to the limits you maintain for your business. It might be tempting to accept the prospects opinions but it not only costs your money yet it makes them feel you can slip anyway for them. If profitable, say yes else don’t waste time making your prospect happy every time.
- Don’t confuse your prospect with too much information. Revealing the details might ruin the chances of accepting your deal and hence it can cause a loss of interest. Not only that, in case the prospect doesn’t accept the deal, your ideas and information can be taken along with them which can cause into business issues. Make it simple and easy for the other party to understand and express your ideas in simple terms.
- Don’t continue to express your product or service as it may reduce the confidence level of your prospect. Make it simple and close it.
- Focus into the goal you kept. Target the work to get done and move on. People don’t offer their time in information which isn’t required and nor do they expect into matters which doesn’t involve businesses.
- Delaying the contract signature is like losing your momentum as well as the interest of the prospect. Hence create the urgency to sign once everything has been discussed. Close the deal by reminding the prospect with time to get work started.
- Once a deal has been discussed and a conclusion has been made between the parties, it is highly advisable to not change the agreement at the last minute. Changing the terms without your prospect’s knowledge might cause disputes in the future terms.
- When a deal is accepted by the prospect, focus on only that goal and not on the future sales. Aim for short-term goals, finish the signing of the contacts and then think over the upselling.
- Over negotiating isn’t the definition of the agreement. Out of 5 points negotiate to almost 2. Instruct the party to keep it minimal as it might affect the company’s development.
When you aim to develop your business, start with small goals first. Not only does that mean to select the best suitable representatives, but most importantly to maintain an agreement or a contract for defining the responsibilities to be followed. Avoid the commonly created mistakes and create an agreement than verbal. Remember, verbal communication causes disputes than documented ones.