Monday, April 12

Should You Go For Contract Sales?

Should You Go For Contract Sales?

After you start your own business you may have passed different hurdles and then you are here. It was not easy letting people know about your business and selling products. Now it’s time to grow! You have to think further so that you can go beyond where you are today. The issue is how are you going to do that?

You have two choices; you can work on your in-house sales team and add more resources. Or you may try something else. What about contract sales? It is a process where you go into contract with a third party sales organization to sell your product on your behalf on basis of some commission.

The moment you take this decision you have to think about the pros and cons of going into contract with some other party. Let’s evaluate them first.

Pros of contract sales

Let’s find out the pros first

  • You will be letting someone expert handle your business on your behalf. They know the market better and of course the demography too
  • While you give commission on sales you do not have to spend a lot of money for controlling a huge sales team
  • The time that you get from this can be utilized for increasing your core competencies and ensure that you are developing better products.
  • You can reduce overall cost of selling as the main cost of selling will be the commission that you pay to the contract seller.
  • It will be easier for your business to explore different territory as the contract seller will have expertise in that. You do not have to spend time understanding the rules and regulations of different places in order to spread your business there.
  • You will still be selling the products under your brand name, so your brand name will not be hampered.

Cons of contract sale

Jus there are good sides to everything there are bad too. You must know the cons too

  • You will be handling over your business to a third party on whom you may not have control. You must think beforehand how you can keep control so that your brand name is always justified.
  • You need to make sure that you are getting something in return. While the contract seller promises to give you an amount of business, they close with almost nothing. You will find all your hard work gone. Thus, it is best to work with someone who will give you guarantee about sales.
  • There will always be an issue about proper alignment with your team and the contract seller.

It’s true that there are certain issues that might come up when you hand over the job to a contract seller but you must remember that such issues will always be there when you do business all by yourself. It is necessary for you to understand how you can manage the cons and then you can take advantage of the pros. When you are selling through contract sales you can find that things are simpler and you are able to give more time to the core business.

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