Updating Old Contracts with New Prices
Question: Some of my clients have been with me for over a decade. Prices have increased, but I haven’t changed the contract. Does it matter?
Answer: Yes. Presumably, when you began your business over a decade ago, you set your original price based on what you believed left you with a reasonable profit margin, after deducting expenses. While your customers no doubt (more…)
5 Effective Alternatives for Selling your Products and Services
When entrepreneurs first start a business they understand that they alone have to sell their products and services. All owners reach a point where they ask themselves, “How can I sell my products or services better?” As a seasoned executive with over 30 years experience, including VP of Worldwide Sales for a $35 million division of a multinational corporation, I’ve identified 5 effective alternates for selling your products and services. Let’s go through the positive and negatives of each one!
1. Owner as Rainmaker
As the founder and owner you know the Product and/or Service best and truly understand the true costs so you are less likely to undervalue the product. Most clients prefer to work with the owner because there is an assumed trust since the owner is not considered a “salesman.” The problem of course is that the owner takes to selling usually when business tends to slow and what happens is this takes away his focus from running the business. When the owner is selling, there is little time to stop and establish a sales plan?
Luckily there are other options available!
2. Inside Sales Personnel
A direct, hourly Employee who sole purpose is selling and providing Prospects with Pricing, preparing written Quotations is a great alternative. These inside sales reps are trained so that they are able to Handle Technical Questions and many companies have inside sales reps deal with both Existing and New clients. By working with existing clients, the sales rep are able to up-sell them. Each business is different but inside sales reps are frequently responsible for Some “Cold Calling” and they have limited ability to negotiate discounts. Because they are direct hourly employees, they may participate in a light Incentive Program of between 1-3% of sales value.
3. Outside Sales Personnel
An outside sales person is typically a Direct Salaried Employee. They are normally on a Commission/Incentive Plan. They need to have extensive technical knowledge of the product or service although they could rely on an inside application engineer, depending on the type of company and it’s product complexity. Outside sales personnel may deal with both existing and new clients but there time is best spent working on acquiring new clients. It is important that territory and assigned customers be clearly defined. Written guidance is required on what authority exists on discounts and other concessions. One of the biggest challenges for companies is establishing an effective written commission plan that will motivate the employee, yet not create any administrative or financial problems.
4. Manufacturer’s Reps/Agents
These are not employees and paid only on sales closed. Companies usually pay the commissions, which can range for 5-20%, on a pay when paid basis. It is important that the company identify a proven manufacturer’s rep organization that is well recognized in the industry and is committed to support the companies goals. Agreements should not only address the companies goals, but should have legal review to ensure that they are in compliance with all laws. Many factors need to be evaluated prior to using this sales channel. Agent is a term that is normally restricted to international sales and advice should always be obtained before appointing an agent.
5. Resellers/Distributors/Private Label/OEMs
Although each of these terms is unique, they have been combined for the purpose of this discussion. The key factor is that they buy and resell your products. However they are representing your company and it is important that a detailed contract be executed. In some cases you may be granting them an exclusive right in their defined market to promote and sell your products. The reseller usually buys your product based on an order already received. Distributors usually have a list of defined products and prices that they can quote. Some, but not all, distributors will actually hold inventory of your product. Because they take title you have to be careful in how much you try and control their sell price. A private label situation is when you reach an agreement that the seller can place their name on your product an sell it as if it was their product. An OEM is a company that uses your product as an integral part of a larger device that they are selling.
With over 30 years experience as a Senior Executive (President, Executive Vice President, Managing Director, Director) in marketing, sales and operations, David Barton heads up Global Management Advisors LLC. He can be reached
Looking for Your Silver Lining?
Coming off one of the worst global recessions, one can’t help but be anxious. However, history shows that every great loss has potential for great rebounds. The trick is to find that silver lining. If you think globally, you just might find your pot of gold.
According to Global Finance, this global recession is proving to be a “springboard” for China and India (as well as other Rapidly Developing Economies (RDEs) like Asia, Brazil, Mexico, and Eastern Europe). Companies in China and India were not immune to the recession and those that were in debt have struggled. However, many companies in those two countries were able to advance or position themselves for growth during the recession.
Many companies from China and India had cash on hand or were able to use stimulus funds to grow. They were in a better position to acquire weaker businesses, make large investments in technology, enter new business areas, or turn their focus to their home markets to foster growth. While “most American companies were in a holding pattern” these global companies have prepared themselves for a post-recession leap. There are obstacles to business growth in both China and India and many other RDEs; a high poverty rate, tight government controls, and lack of financial transparency are a few of the stumbling blocks. To service companies in RDEs, it will be crucial to know both the legal system and cultural customs of those RDEs.
It won’t happen overnight, but China, India, and other RDEs are poised to become global industrial and financial centers, and this century may prove to be “The Asian Century.” In the coming years, it may pay for you to increase your global business awareness and search for new opportunities, especially in Asia.
Global Finance, http://www.gfmag.com/latest/features/9932-cover-story-global-leaders-in-waiting.html
Protecting Logo Against Competitors
Qustion: The trucks we use have a very distinctive logo involving color and design. Can we protect them so no competitor can copy that design on its trucks?
Answer: Yes. Assuming there is no prior conflict, you may be able to register the design as a trademark logo. (more…)
Company’s Trademarked Name, Is it National or Local?
Question: I plan to expand my operations to another state this year. Is the trademark or trade name on my company’s name national? Or does it only apply locally?
Answer: Your company’s name is a tradename. While a trademark is used to identify and distinguish the trademark owner’s goods from those of another (more…)
