How to Switch from Sales Rep to Independent Agent in 5 Easy Steps

If you are a good sales exec and have a long track record, you might think about a second career as an independent sales agent. Setting up your own agency is a proven way to increase your income, recession-proof your career, and be your own boss!


Sales agencies are fast becoming the most popular form of entrepreneurship. This is because a sales professional who has been working for many years for a single company will have a lot of portable skills. You will have a network of customers who know you and trust you. You have honed your craft and possess the necessary know-how and determination to be successful.


The times are with you. In times of economic uncertainty, many companies are entrusting their sales to outsourced agents. The era of jobs-for-life has come and gone and, as a sales professional, it makes good sense to hedge your bets by becoming an independent sales agent and buttress your risk/reward ratio by adding other brands, products, or services to your portfolio.


Your Eggs, Several Baskets


An independent sales agent, according to statistics published by the US Manufacturers' Agents National Association, averages more than $150,000 a year in pre-tax income, while the average US wage for a mid-career in-house sales exec is about $83,000.


The old argument that having a stable and steady job as an employee is safer is rapidly being debunked. As an employee, it is true that you are guaranteed an income even in lean time for sales, but your future and fate is in the hands of other people – other people who could easily decide to downsize or restructure at any time. Moreover, if you are selling only one product, all your eggs are in one basket. If market demand suffers a downturn, you could be the best salesperson in the world and still end up unemployed.


By setting up your own business, you can spread the risk across as many as 10 different product lines, boost your opportunities for cross-selling, and increase your bottom line even if one or two of your brands are underperforming from time to time.


Taking the Plunge


As a sales professional who may be approaching a crossroads in your career, striking out on your own could feel like a daunting prospect. However, your chances of setting up a lucrative entrepreneurial business for yourself after 50 are even better if you are willing to take the plunge. You will be riding the wave of business trends toward outsourcing and boosting your chances for success by identifying new winning products to rep.


This is not to say that it is easy – it will take a lot of hard work on your part. You will not have any higher-ups pushing you to make quotas and close more deals. You are the boss and your results will be directly proportionate to the effort you put into it. But on the other hand, you will be free to set your own goals, to choose the products you like and believe in, and set your own pace.


The following five easy steps will help you orient yourself and make the transition from employed sales exec to independent sales agent a little bit easier and, with luck and good sense, more profitable.


1. Build Bridges, Don’t Burn Them


When you are considering making this switch to an independent sales agent, an easy mistake to make is to forget your first and best prospect – the company you are working for now!


When you decide to go out on your own, your employer could consider you a threat. You could, after all, steal customers from them or run to the competition. In the long run, this strategy will not help you build your new business. The world of sales is quite well networked and news of unethical moves will echo across the field.


Instead of leaving as an adversary, secure your current company as an ally. Before making your move, set up a meeting with your sales manager or sales director and make the case for your working as an outsourced salesperson. The benefits for the company are very tempting – it will cost them less in salaries and taxes, they can be leaner and still show the levels of turnover they want, and they can continue to get their return on investment in you over the years. Moreover, it will help the company become agiler and give the ability to make structural changes more easily.


In the meantime, they benefit from having a sales agent who knows their ins and outs better than most. You know their products and product lines well as you have been working for them for a long time, and you will most likely be even more productive for them as you will be happier in your new business! It is a win-win scenario that you should sell to them as early as possible in the process of setting up your agency.


This is, of course, a double-edged sword, because it means they could also stop working with you. But a good company will recognize the benefits, appreciate your open and honest approach, and acknowledge the loyalty you are showing them, further enhancing your position.


They may not take you up on the proposal – after all, you are leaving them. But be persistent in your pitch and they may come around. If they don't, you have left your employment with your reputation intact and your good name unblemished.


Chances are, you will end up with a better working relationship with your former company than you ever had before!


2. Choose Non-Competing Products and Brands


When you are starting out with your agency, it is likely that you will be a one-man-show at least in the beginning. That makes your choice of products and brands a critical part of your business. The worst nightmare of a sales department is that the same agent is proposing competing brands to the customer. There is an inbuilt conflict of interest in that kind of approach and you could find yourself hard pressed to get potential clients to trust you with their sales.


Instead of making yourself these kinds of problems, have a look at the market and look for non-competing lines that you could propose to similar or the same customers without threatening any of them. If your product is ice cream, you could also carry a line of cups and cones, milkshake mixers, or even store furnishings. In this way, your customer base could buy from several of your brands while none of them would suffer from it.


If you are selling software packages, make sure that none of your clients is trying to undercut the other or beat them to the innovative punch. Choose developers that are working in diverse areas – database management, gaming, accounting software, and logistics packages. Your clients will appreciate the integrity you show, but even more important, they will trust you and buy more from you over time.


Another aspect to consider is exclusivity. Clients will sometimes pay more or give you a higher percentage of sales by entering into an exclusive contract with you. Be aware, however, that this is one-sided exclusivity and while you are prohibited from approaching other competing companies, they can have any number of sales agents or in-house sales execs that will be competing with you!




3. Look at a Map


Although it is true that we are living in a time where face-to-face meetings are not indispensable for sales, it would be much more convenient to survey the geography of your clients' locations.


Deciding how to establish sales territories to create the most efficient environment is more difficult than just drawing lines on a map. The process requires a good dose of foresight that's needed to make sure you allow room for the company to grow.


Common sense should be your guide in this. If you have five big clients but they are spread out from New York to Madrid to Kuala Lumpur, you may be spending a lot of time and money with the airlines instead of doing what you are supposed to do – selling! Consider the costs involved, including the opportunity costs of having a client base that is hard to reach.


As a new start-up, you probably will not be hiring more salespeople right away. You have to start strategically by meeting revenue goals in smaller areas and then gradually growing the territories.


4. The Rules and Regulations


Do you need a license? If you are setting up an international business, some countries may require you to have a specific license or local rep office established in order to sell in their territories. You may be thinking of servicing a wide area like Europe, the Middle East and Africa (EMEA). If you have the capacity, EMEA can be a very lucrative source of new clients and revenue. In many countries, you may need an import/export license. In some, you may be required to have a local partner. Before starting out, have a look at what the requirements might be.


Furthermore, certain industries require a knowledge-based, qualifying tests in order to be licensed to sell. Financial products, insurance, or pharmaceuticals are examples of products needing a license. Research your industry requirements by contacting its industry trade group or regulatory body. Better safe than sorry!


5. Stay in Touch


Any sales professional will tell you that selling is a people business.


It is about establishing relationships and maintaining them. Over the years, you will have already built up a good network of contacts for yourself, but now it has to be expanded and put to work for you. Also, it is important to remember that your contacts might only know you for the company that you started out in – they need to be told about the new venture you have started by becoming an independent sales agent.


Social media and LinkedIn, in particular, is a great place to get the word out about your new business. Make sure your LinkedIn profile is working for you by keeping it updated. You can also use it to publish news about new product lines you carry. Moreover, why not think about publishing a regular blog on LinkedIn that your clients and customers can read. Make it about an aspect of sales about which you have some experience and expertise. Readers will appreciate your insights, trust you a little more, and spread the word to their friends and connections too!


Also, do not forget to set up a company page on LinkedIn for your new agency! Today, LinkedIn serves as a validator and a legitimizer for people and companies and, if they want to check you out, they will probably go there first!


Your network will be your best resource for growing your new business. Take the time to tend to it regularly and, like your own personal garden, it will bear fruit for you!


Do you want to be an IT entrepreneur?


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