For a startup only paying for services when you get paid by the customer is very alluring. A well-chosen Sales Rep firm can provide valuable access to market decision makers and the credibility they give you can be priceless. But in most states an agreement with a Rep Firm is a commitment that has to be honored and is not easily broken. The “deal” you negotiated when you were just starting can look like a cash cow for the Rep firm years later. The alternative, hiring a direct sales force, takes time, money, and industry contacts have to be created from the ground up. But, once operating, a direct sales force will do what the company wants even if that changes over time. And, the client contacts are the property of the company.
It is not easy hiring the right Rep firm. The best ones in your industry may not be interested in working with a small, relatively unknown startup. Rep firms looking to expand into new markets may not have the contacts you would like or need. And, all Rep firms have additional suppliers on their line-card so they never work 100% for you.
Some companies are not good at exciting potential Rep companies and selling the advantages of working with a startup. And, some companies are not good at understanding how to create a direct sales force and how to hire the right people.
An example of a client company who is building a direct sales force is Beyond Zero in Louisville, KY. This startup knows their market and their customer base. They are ramping up their direct sales force and teaching each new hire what it is that is unique with their product and how they are changing the market. The Kentucky Innovation Network worked with them to find a manufacturing partner and to work with them raising capital.
An example of a client company who is dealing with Rep partners is Auto Chem of Kentucky, a supplier of specialty chemicals and systems used in industrial cleaning of paint. This very specialized market requires someone already on the inside to penetrate the market. The Kentucky Innovation Network has worked with this company in a number of areas including strategy development and workforce development as well as introductions to local service suppliers.
At the Kentucky Innovation Network we have found that the smartest choice is a function of many factors and that it is best to sit down one on one with a company and get to really know them before making any recommendation. Contact us at our website or on Twitter to see if we can help you.