Independent Distributors market and distribute products receiving compensation based on sales results – a fair profit on products sold. Often companies seek out successful medical product distributors. These distributors may do well initially but companies seek more sales. There are various ways for companies to help increase Distributor sales of their specific products.
Sales terms and agreements made for sales through distributors depends on the specifics between the manufacturer and the distributor. There may be different sales terms of sales agreements such as pricing or quotas for stocking distributors, direct buy, or direct distributors and an array of creative Commission Structure Variables. Often companies seek to align their product(s) with major distributors with expectations of volume sales. Moreover, this often comes with smaller margins for the manufacturer.
Major distributors often carry a full catalog of items. As a result, not every SKU item in the distributor’s catalog receives the attention the manufacturer hopes for. Eventually, the manufacturer seeks to increase distributor sales. Ultimately, this can be done by creating demand for the product and aligning specialty sales representatives to promote specific products.
Increasing sales with independent sales representatives
Expanding the sales team of an independent distributor by aligning independent 1099 medical sales reps can improve distributor sales results. Sales team expansion is a critical element for distributors for increased success. Often, distributors add more products to capture more sales and revenue. However, adding more products to a distributor’s portfolio should equate to adding more independent sales reps.
Most distributors hire and train their own independent sales force or they may augment with direct or contract reps. A distributor will often recognize the need to increase its independent sales force with independent 1099 reps. Ultimately, this can provide the distributor a focus to target specialty call points their present sales team may not be calling on. In addition, team expansion allows utilizing niche sales representatives for targeting a specific niche or white-space.
Challenge of aligning only large distributors
Larger distributorships tend to handle multiple products and can often offer critical mass. At this point, it is initially rewarding to place your products into the hands of larger distributors. However, a potential downside of large distributors is when a manufacturer finds there is a struggle for their products to maintain the larger distributor’s attention. Surely, initial mass sales may have resulted and that was the goal. However, what can you do to continue sales expansion and increase your independent distributor sales?
Incremental company growth can be dependent on the manufacturer’s focus to penetrate under-served channels your distributors have not targeted.
Many manufacturers will augment their major distributors with multiple sub-distributors, smaller independent rep teams, managed rep teams and lone star independent sales reps. There are multiple benefits to aligning and augmenting your distributors’ sales with independent reps and rep teams. Specialty niche independent reps are hungry and often very flexible. Independent sales reps will work without significant resources supplied by the manufacturer or the company brand. Independent reps and independent rep teams will utilize the professional relationships they already have established over the years.
A manufacturer or product supplier (vendor) to the distributor can assist their distributors to improve sales and market penetration. This is done by creating demand for the product such as advertising, attending trade shows, additional marketing. Moreover, the alignment of independent reps, rep teams, and managed rep groups will be beneficial. Furthermore, these independent reps are already out in the field prepared to introduce the company and company products. Most importantly, independent reps will often focus more on specific products rather than a catalog of products.
Common situations in need of increasing market space
Routinely, we receive inquiries from medical product manufacturers and major national healthcare service providers regarding increasing their market penetration. Very often, they want more sales from their sales and distribution partners and they’re exploring their options. As an example, a call received yesterday — the CEO of a healthcare related software company informed us the company was already established in 50+ countries and in 55+ languages for several of their products and services offered with over 10,000 clinical users. (Pause for thought: Do the math, 55 countries with only 10,000 clinical users? = weak market penetration. Wouldn’t you agree?) In addition, he explained they had a niche product requiring targeted call points and specialty sales reps calling in this area. Niche call points are a perfect example where independent 1099 medical sales reps can assist. Likewise, aligning independent reps specifically based on their relationships will have a critical impact.
In other situations, manufacturers may have already aligned a few distribution partners. Alternatively, perhaps even a few sub-distributors were hired. In reality, they are all doing well but additional corporate sales would be realized with adding additional distributors and distributor reps. Likewise, the manufacturer will benefit from a more targeted focus on their specific products.
All in all, each distributor has its own unique situation. Similarly, they may have already established high volume sales in your specialty niche. (Isn’t that why you chose them?) Equally important, their sales are impressive but they’re still not performing to the level you would like to see. Likewise, there may be some niche areas they are under-performing in.
Seven tips to consider implementing to increase distributor sales
- Align independent reps, independent rep groups, and independent managed sales teams. Commonly, adding reps creates your own sales team. In addition, for the benefit of increasing the sales force for your already aligned independent distributor(s).
- Add multiple sub-distributors strategically located to expand distribution capabilities
- Augment distributors and sub-distributors with independent reps and independent rep teams as lead generators for complex sales. Get the leads then provide support with knowledgeable closers.
- Identify all target call points and align individual (lone star) independent reps or small rep groups calling on those niche specialties. Cover that white space!
- Attend Monthly or quarterly sales meetings with your established distributors and successful sub-distributors – keep the product in front of the team leaders and their sales rep members, provide product and market updates. Most distributors welcome manufacturers to participate with an educational and motivational presentation on their product (s) or service offering.
- Sales Contests – Sales professionals love a challenge! Be creative. Support your distributors.
- Incentive Bonus – Goal Oriented – Consider adding a bonus. Get creative with your commission structure!
- Bonus Tip: Be sure you provide compelling marketing collateral. WOW the buyers!
For additional information, review Is the Product Hot or Not: Perspective of a Sales Rep