Hiring a Sales Representative Embroidery Project

Before taking any action, you must first assess where you are with your business and where you want to go. Hiring a Sales Representative (or any employee for that matter) means that you are turning over certain portions of your operation to a complete stranger and trusting them to do as good a job as you do, consistently and with integrity, each and every day. Are you comfortable taking that risk? Are you really ready for it? The stark reality is that once you turn your Sales Rep loose, you will not be in control of what they do or say to your customers, as you won’t be there looking over their shoulder. After all, if you have to micro-manage the individual, then it defeats the purpose of hiring them in the first place.

Once you have fully thought out what is involved with bringing a Sales Rep into your organization, then you can turn your attention to identifying the ideal candidate. The first step is to define what personality characteristics will be needed to make this position work for your company. This will make it easier to sift through resumes and narrow down the list of candidates to a manageable slate of qualified individuals. It will also give you a guideline of what to look for during the interview process.

Not everyone is cut out for sales. By necessity, a Sales Rep needs to be outgoing, friendly, and somewhat charismatic, with a slight touch of aggressiveness thrown in for good measure. Without these traits, he/she likely will not be successful. More often than not, a sale is made because the customer likes what the sales rep has to say. In other words, they are buying the person, not necessarily the product. Think about the Sales Reps that you have encountered and who you have bought from. Chances are the same concept applied: you liked the person so much that the actual product or service that you purchased was almost secondary.

A sales representative should be outgoing, friendly, and especially self-motivated to succeed. But being friendly is not enough. Impressing a client and closing a deal are two separate things. A certain degree of aggression, tempered with patience, is necessary to keep the deal moving forward until the paperwork is done and a check is received. Such perseverance is an essential characteristic for a reliable Sales Rep. Independence is important as well. A professional Sales Rep will spend most of their time outside of the shop, traveling from one client to the next, unsupervised. That is the way it should be. If you have to manage the Sales Rep, chances are they aren’t getting the job done and won’t bring in the deals you need. And finally, a successful Sales Rep needs to be self-motivated, with a burning desire to close deals and make money! The most frequent question asked about Sales Reps is “What do you pay them?” Ultimately, that depends on a lot of things – geography, economic conditions, experience, etc. The most common method of compensation for a Sales Rep is 100% commission, usually 10% of the gross sale. (I’ve heard various amounts ranging from 5% to 15%, but 10% seems to be the most common figure.) Typically, you will also reimburse expenses which may include travel, mileage, phone calls, samples, etc. In addition, most Reps will also demand benefits. Some Sales Reps will prefer a base salary, plus commission. When that is the case, it’s standard to pay a lower commission rate than if they are receiving 100% commission and no base. I have found that an experienced Sales Rep is quite comfortable with commission only, as they have the self-confidence to go out and close deals, whereas someone who is inexperienced or unsure of their own capabilities prefers a base salary plus commission. These are things you will need to sort out. Regardless of what method you decide to go with, take a long hard look at your profit margins and how they will be affected by your Sales Rep’s compensation plan. For example, let’s say that the Sales Rep brings in an order for 24 polo shirts at $25.00 each, for a total of $600.00. Your margin on the shirts is $10.00 each, resulting in net revenue of $240.00 on the order. Now you have to pay the Sales Rep 10% of the total order, which calculates to $60.00. Though the commission is based on the gross revenue ($600), it comes directly out of the net revenue ($240), leaving you with $180.00. In reality, you gave up 40% of your net revenue on the order to the Sales Rep, though his/her commission was only 10%. This is an area that is commonly overlooked when paying commission. It would seem logical to pay the commission based on the net revenue, but that is too difficult for the Sales Rep to calculate and will lead to a lot of misunderstandings and problems. (Plus, you don’t really want your staff to know what you are making.) So before you even consider compensation plans, do some research to find out what where the commissions will be coming from and how they will affect the bottom line. In all likelihood, you will have to raise your prices to cover the cost of the Sales Rep. As an alternative to hiring a full-time Sales Rep, who will be a bona-fide employee, you might consider an independent Sales Rep. Independents work for themselves and usually represent several product lines. In some cases, they will agree to be paid commission on what they bring to you, while in other cases, they will work out a pricing system with you, where they simply mark-up your products above a standard agreed-upon rate.

The nice thing about Independents is that you aren’t going to have to worry about benefits, unemployment, taxes, etc. as they are not on your staff and not on your payroll. They truly are independent contractors.

However, on the downside, Independents usually represent multiple lines of related products and those products and services that generate the most income will get the most attention. In fact, it’s not uncommon for them to routinely drop product lines, because they aren’t generating enough income. Just because they represent your products and services doesn’t mean that they give them 100% of their time and effort. Overall, Independents have a lot to offer, but they can be hard to find, as the most successful ones are deluged with product offers which allows them to pick and choose what they decide to carry.

Regardless of whether you have a Sales Rep on your staff or you use an Independent, you have to train them how to sell embroidery, and this will be far more challenging than determining what to pay them.

Because of all the variables, it can be challenging for even an experienced embroiderer to come up with a price on-the-spot while on a sales call. And your Sales Rep is not going to be anywhere close to having the knowledge that you do. Many shop owners make the mistake of trying to educate a Sales Rep by training them to run machines, in order to give them a better understanding of the process. Though useful, it’s really a waste of time. Instead, you have to create a pricing system where the Sales Rep can quote a job without having to be an experienced embroiderer.

Typically, this means creating a flat-rate pricing system, in which the embroidery cost is fixed regardless of stitch count, since it’s highly impractical to expect the Sales Rep to be able to estimate stitches. (Most shop owners can’t even do that!)

For our purposes, we assumed the average stitch count for left-chest and cap logos to be 7,500 stitches. We had stitch count pricing based on quantities, so it was a simple process to do the math and come up with fixed rates for different sewing quantities. We then calculated markups on garments, again with percentages based on quantities. Then we merged the two together, so that we had a fixed price list which included garment markup and stitch pricing all rolled into one. This enabled our Sales Rep to make quotes on the spot and ensured that he didn’t under price anything. If there was a question, he could always give us a call. (By the way, jacket-backs and full-fronts still have to be priced out using the standard methods, as their stitch count can be way “up there.”)

Once you have hired a suitable Sales Rep and created a workable pricing system, then you need to turn your attention to creating a Sales Kit to aid the Rep while he is visiting with potential clients.

You should already have a sample kit on hand that you created for yourself. That will be a good starting point, though it may not be the best setup for someone who is not an embroidery expert. Take a minute and think about the limitations you need to place on your Rep. While the idea of limitations might sound counter-productive, it’s vital that you focus on setting boundaries that keep the Sales Rep working within their zone of product/service knowledge. Custom embroidery has way too many variables for a non-embroiderer to easily manage, so keep that thought in mind.

Start by choosing your most popular merchandise, such as polos, t-shirts and sweats. Choose three quality levels for each item: high-end, mid-level and promotional. Explain to the Rep what the differences are in each quality level. Also discuss suitable locations for embroidery.

With caps, choose styles that you know work well on your machine. (Avoid handing over a cap catalog and crossing your fingers that everything works out.) Get samples of the most popular styles, but not every style. Explain to the Sales Rep that embroidery space is limited on headwear and to use a business card to represent the available space for the front. Also talk about other embroidery locations such as the sides and backs. Do this with each item that you want the Sales Rep to promote.

	Making your own catalog is the easiest and most efficient way to help your Sales Rep bring in deals.

Obviously you want the Rep to be prepared to offer everything under the sun to prospective customers, but too much choice can be overwhelming for both of them. Therefore, you may not want to give the Rep a bunch of supplier catalogs, as this can open the door to a lot of trouble. Instead, consider making your own catalogs. This can be done quite easily using a scanner and ink-jet printer. Create individual pages with pictures and pricing, then print out on high quality paper using high dpi print settings. Purchase a large three-ring binder, and three-hole sheet protectors. Slide each page into a sheet protector and install in the binder. This gives you much more control over product selection than using a catalog, plus you can include your pricing with every item instead of having separate, detached price sheets. In addition, you can easily make updates, deletions and additions at anytime.

If handled properly, hiring a Sales Rep can bring a big boost to your product sales! But don’t expect any overnight miracles, as the individual will need time to get comfortable with the products you offer, the methods of selling them, and the nature of the marketplace. Make sure that you give them the training, tools and advice they need to be successful before they go out on their first sales call, and take the time to routinely follow up with clients that the Rep has visited to get feedback on the effectiveness of your employee. Though you don’t want to micro-manage, you must always stay in control of your staff.