Major Companies and Dealer Programs
Major fortune 500 companies know that outsourcing sales can be one of the fastest and most lucrative ways to grow your business.
Benefits of Outsourcing Sales
Immediate Sales – If you get in with good distributors you will see immediate sales go through that will consistently grow.
Pay Per Sale – One of the major benefits of running these programs is paying people per a sale on a contractor basis.
Per Sale Contingencies – Such as if deal cancels within 90 days there is a 100% chargeback of the commission. Certain contingencies when acting in good faith can ensure everyone can have a win-win situation.
Less Wasted Money On No Performance – If you are hiring people on hourly or salary there can potentially be ramp-up periods, training periods or you run the risk of having someone not perform whatsoever. When you find that good hourly worker though that pays returns. That’s why we do both! It can be impossible to change someone’s mind who is determined to do one or the other. Some people claim to be in sales but have no understanding of concepts such as they only have their job as long as they perform! Making the pay contingent on sale will prevent some people who claim they are “expert salespeople” who believe they deserve to be paid for just being there, coming into your company and taking a salary without performing.
Not Having to Pay Benefits or Retirements – You pay people money and do not have to worry about paid leaves or dealing with employment HR related issues. A lot of the insurance risks can be left out due to requirements such as having insurance policies and do not have to worry about potentially expensive retirements such as pension plans.
Potential Cons of Outsourcing Sales
Although it could seem like there is no down side to paying someone commission-only here are a couple down sides that we are honest about.
Upfront Costs – Most companies offering commissions to sales contractors will pay a upfront bonus or a spiff upon sale which is multiples of months of what a client will pay throughout the course of using the product or service. Sometimes a residual option can be opted.
Potential Fraud – This could be a major issue. It is important to have a distributor that is concerned about that and vets potential sub-dealers as they onboard them. This could be serious illegal activities that people intentionally try to commit.
Potential Lies About Deals – This could go hand-in-hand with fraud but sometimes is considered less harmful. This would be sales agents claiming they have better deals or selling in such a way that it was misinterpreted and leaves the customers upset.
Potential Churn – If you are a business trying to incorporate some sort of a distributor program or a dealer program, a lot of these sales organizations and marketing organizations might already sell your product for other companies. Although this can be true and people may call the distributor to switch after their promo is up what you will find is that people can be inconvenienced to switch right at a certain period even if solicited to. It ends up being more profitable to runs these programs and to take these risks that’s why companies do it. What you will find is Potential Fraud might be happening if accounts are being placed with new carriers every 90 days or immediately after a chargeback period or so. That is also why it can be beneficial to work with a distributor like CGE that does things like find ways to get potential clients when interested and do things like run concierge move-in programs for people when they get moved in because a lot of times when someone gets moved in they need things and may never change services.
Although there can be potential cons of outsourcing sales to sales contractors, the benefits seem to outweigh it and that is why many famous companies both private and publicly traded in the S&P 500 choose to run authorized dealer programs and choose to run them through Capital Group Enterprises. If you are a company looking to expand, maybe you should look at Capital Group Enterprises as a master distributor of your products. We already have some of the infrastructure ready to support some of your needs.