Brands w/ Independent Sales Reps More Likely to Invest In Sales Technology

By
Sarah Leung
September 8, 2015

Field sales remains a significant channel for countless wholesale distribution companies across industries. As we’ve discussed on this blog before, optimizing your in-person customer experience is critical to your revenue, growth, and customer retention. Today, many wholesale brands and distributors are investing in mobile order writing software, equipping their reps with a digital catalog, customer contact information, order history, inventory levels, and customer-specific pricing to make for more strategic, consultative conversations. Orders are written on a mobile device and then synced with back office systems for fulfillment. The elimination of cumbersome manual processes like paper order writing and submission via fax, phone, and email means fewer mistakes and faster picking, packing, and shipping. For some wholesale brands, however, a reliance on independent sales reps––many of whom are also representing other brands and lines––can make the decision to invest in order writing software difficult. Is it worth it to invest in these non-salaried employees? While we’ve written about this topic on the blog previously, recent research has revealed some surprising insights into how companies are actually prioritizing this technology for their independent sales reps. In July 2015, Handshake conducted a survey of companies self-designated as wholesale distributors across 12 industries. One of the topics covered in the survey was the use of independent reps, and whether or not those companies were investing in order writing software. Let’s take a look at the data.

Wholesale Distribution’s Widespread Dependence on Independent Sales Reps

For many wholesale brands, independent reps are a key part of their sales strategy. Indeed, 65% of wholesale distributors surveyed reported that they work with independent sales representatives (also called manufacturer’s representatives) in some capacity. The Top 10 industries with the most respondents employing independent sales representatives or agencies include Toy, Baby & Kids, Electronics, Beauty & Cosmetics, and Gift & Homewares. These results are likely unsurprising for readers in those industries.

Figure F. Top 10 Industries with Independent Sales Representatives

IndustryPercentage of Respondents w/ Independent Reps

Toy, Baby & Kids 79% Electronics 78% Beauty & Cosmetics 76% Gift & Homewares 74% Medical Instruments 73% Eyewear & Optical 64% Outdoor & Sporting Goods 61% Apparel 58% Books 56% Food & Beverage 52%   For some companies, it is not cost-effective to employ in-house reps. Others simply need to get salespeople on the ground quickly to penetrate new markets, without the investment of time and resources needed to establish an internal team. Others are looking to take advantage of an independent rep or rep group’s existing network of retail relationships.

Brands Investing More in Sales Technology for Independent Reps

Given that independent sales representatives often work with a suite of multiple brands, businesses face tough questions about whether or not to invest in technology for these external sales teams. However, in the midst of heavy competition, businesses that employ independent sales representatives are realizing that the ROI impact of more streamlined order management processes make technology worth the investment. Of those surveyed who work with at least some independent sales representatives, 37% are investing in order writing software. The most surprising insight that came out of this data was the fact that of those surveyed who work exclusively

with independent sales representatives, the majority (54%) have invested in order writing technology––15 percentage points higher than the survey-wide order writing software adoption rate of 39%. In comparison, only 13% of wholesale distributors with no independent sales representatives are investing in order management software. It’s clear that companies using independent sales forces are realizing the competitive advantages of order management technology more readily than their counterparts with only salaried sales teams.

Why Is This The Case?

So why are companies using independent reps investing in order writing software? It could be a number of reasons. Brands with independent sales representatives often employ a combination of individual independent sales representatives, rep groups and agencies, and their own internal field sales teams. With orders coming in from such fragmented sources, order writing inefficiencies and disjointed order submission processes quickly create a sense of urgency to streamline order writing and submission into one common workflow. Similarly, if a brand has many independent sales representatives, it can be extremely difficult to make sure that the reps are on the same page with headquarters. Whether there’s a new product to add to the catalog or pricing changes, order writing software allows companies to sync those changes to all of their independent reps from one centralized location. Are you thinking about investing in order writing software for your independent reps? Why or why not? Let us know in the comments below. This blog post features just one insight from our recently published 2015 Wholesale Technology & Sales Survey Report. To get more insights on the current state of the wholesale distribution industry and how you stack up to the competition, you can download the entire report for free here.