Selling Agents Agreement For
Home Business Start Up
 There often comes a time with the small home business start up
manufacturer, when they would like to have selling agents to make sales for them, as they are so busy making
the product. But this can be a very unsatisfactory arrangement and must be set up properly and constantly
monitored.
Most selling agents will put the effort into the product they offer which sells best. If they get a couple of
‘knock backs’ when they try to introduce a new product, then they will let it sit in their car – often getting
damaged in the process – and who would want to buy something when they are shown a damaged sample? Your home
business start up can get a very bad name from a selling agent.
At the very least a home business start up should put an agreement in place with the selling agent (and ensure
they monitor the progress). Understand the difference between a Distributor and a Selling Agent. The distributor buys the product (at a greatly reduced price, often 30-50%)
and it belongs to them. They then sell it at whatever price they want. Often there is a sort of partnership –
where both the home business start up manufacturer and the distributor agree to share marketing e.g. a Trade
Fair stand.
A selling agent is your representative and is answerable to you. You may pay a retainer and/or a commission,
making them in effect an employee. They must sell the product at the price you set and report back to you. You
arrange to send invoices. Normally commission is not paid until the invoice is paid. In the event of a bad or slow
debt, the selling agent may also agree to ‘chase up’ payment, as it is also in their best interest so that they can
get paid their commission. Just make sure you have these points covered in the initial agreement.
If you decide to use a selling agent, don’t rely solely on phone calls or emails telling you how the product is
selling (or not selling). Insist on a regular report to be completed and returned. You should then consider setting
up graphs based on the information received to measure the success of the selling agent. Copies of these graphs
could also be given to the selling agent to make sure that they not only see what they are achieving, but they know
that you, the home business start up, are checking out the results.
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No Cost
The template will provide the fundamentals for
a
Selling Agent’s Agreement
it is a good starting point for further development.
You can access your FREE Template here.
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Case Study for Home Business Start Up
‘Selling Agents Agreement’
When Barbara Gabogrecan began her art business, like many other new businesses, she realized
that she needed help to sell her product as she was flat out producing it. A gentleman saw her art
work at a framers and enquired how to make contact. He was interested in becoming an agent.
Barbara accepted his offer and there was a good relationship built with good sales being made.
Then he moved interstate and Barbara tried another. He was hopeless. The product was left in a
messy state in his car and actually had to be thrown away once it was returned to her. She learned
that without an agreement and strict ‘follow up’ and monitoring, using an agent was doomed to
fail.
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Tip When Developing a
Selling Agent’s Agreement for Home Business Start Up
Write it yourself. Of course you can get a solicitor to do it for you, but
not only will that cost, it still does not safeguard you unless you have the cash to take your
selling agent to court if he reneges.
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