Sales force outsourcing is not a new idea. It has been a dwelling practice in small and big businesses alike. Sales agents, distributors and resellers are the most common set ups in sales force outsourcing.
This industry however has been threatened with the rapid rise of BPO (Business Process Outsourcing) forcing Sales Force Outsourcing to be strategic alternative to indirect channels and sales agents.
Two Models Of Sales Force Outsourcing
There are two models of sales force outsourcing: sales agents & distributors / resellers and BPO solution of Sales Force Outsourcing.
A sales agent is someone who is self-employed and is the person who sells products in behalf of a company. Most often than not, the terms of payment is on commission basis though there are instances wherein a sales agent has basic salary. When delving into retail or manufacturing, sales agents usually carry multiple products and have established contacts. One may think that sales force outsourcing is a good option as solution. Yes it is a viable solution but this too has its own limitations.
The specialization of sales agents is based on a defined market that depends on the geography or the industry of a particular sector. They will only go for products that are sellable to their available contacts. This means that if you outsource your product to an existing market that has no interest for it, sales force outsourcing is not a good solution. For example, I know someone who works for a company who claims to have the best strollers on the market, but can’t sell his way out of a paper bag. My thought is that perhaps he doesn’t believe enough in the product.
Another limitation of sales force outsourcing is for you to be able to have a larger coverage, you will need a number of sales agents that will need dedicated management resources to optimize your outsourced sales force.
Distributors / Resellers
Another option that may prove to be a good a solution for sales force outsourcing is through an indirect channel network. The important aspect when talking about distributors and sellers is that they own customer thus living to up to the name “indirect sales channel.” This aspect is also the difference between sales agents and distributors / resellers.
While a sales agent sells products for you or your company, distributors / sellers on the other hand buy your products and sell them to their customers. With this, you drop control over the end customer as well as being able to sell other services and products directly.
Just as the same with sales agent, it is limited to a point wherein you can only sell to those who have customers that are interested with your products. Otherwise, sales force outsourcing through distributors / r
esellers will be a lost cost. That is why you need to choose carefully whom you partner up with – always research, research and research.
Sales Force Outsourcing Organizations
In the past, companies build an in-house direct sales force. The process in doing so requires a large amount of capital as well as expertise. Hiring, training and managing this kind of set up will put wholes in the pockets of companies.
But if this kind of setup costs a lot of money, why do organizations opt for this? The answer: control. When sales agents or distributors / resellers sell your products, you have little to no control on what they do or how they sell your product.
Having an in-house sales force, a company will be able to have control over its markets, prices as well as choice of customers. This setup can be a competitive edge over other companies in the same industry.
As of today however, the business process outsourcing (BPO) sector is on the rise and because of this sales force outsourcing is becoming an alternative to having an in-house sales force. Unlike with utilizing sales agents and distributors / resellers, you still have control over the target markets, sales activity, and pricing.
It is like having an in-house sales force without having to shell out much capital money.