1. Is it normal to find Sales Rep working on commission in Germany?
Yes, it is far more common than in other European countries like, for example the UK or the Republic of Ireland were the Sales Agent is a dying breed.
2. Which industries normally use Sales Agents?
In general, all those that require a certain degree of bespoke production, those that do not require an aftersales or technical service or those in which there is no need to keep large stocks for immediate delivery. As cases in point, we might cite the clothing industry, industrial subcontracting or furniture. At this juncture it is important to choose the correct channel through with you go to market. A good way to decide this is by looking to see what your direct competition or related industries are doing in your target market.
3. What are the main qualities we should be looking for in a Sales Agent?
The ideal candidate would be one that is already visiting our target clients. That is to say that the products they are already selling act as an introduction to your own.
The personal attributes of the Agent are also very important. You are going to be working with them on a daily basis, so it is essential that you both “connect”. This can only be ascertained to your satisfaction in a personal meeting/interview. It is never advisable to rely on hearsay, recommendations or no more than electronic communication. If you have shortlisted a candidate as suitable for the post, but you leave with nagging doubts, don’t rush into anything! It is worthwhile meeting him in your firm. Before signing any contracts, suggest you visit a few clients together. This will enable you to see how the Agent carries himself in his natural habitat.
4. What are the key factors that will contribute to a successful long-term relationship with an Independent German Sales Agent?
It is unreasonable to expect orders from day one. However it is crucial to make the Agent feel that he is “part of the team”. He needs to know that he has the full backing of his principals.
Amongst other measures, this can be achieved by giving him full product training before he goes out into the field, replying promptly to enquiries and making sure samples are despatched as soon as possible and, of course, visiting customers with them. This not only demonstrates your support to your Agent, but also shows the client that the Agent has the full backing of the company. These measures will contribute to assuring that the Agent gives sufficient time and effort to our products.
It may seem obvious, but “talking to your agents on a very regular basis” will do wonders to boost morale and I would recommend a minimum of one trip a year to the market.
5. What are the main questions or demands that German Agents ask of a Spanish firm?
Generally speaking, German agents are around 50 years old and there are many that do not speak fluent English and some no English at all. Thus many will require their principals to have German speaking staff.
In goes without saying that Germany is a mature, oversupplied market in which German agents will opt for local companies before looking overseas. This excess offer means you have to be certain of the strong points that distinguish you from the competition. You should also be able to make a competitive offer that makes you stand out from your local rivals. The German market is especially sensitive to “efficiency”: prompt answer to enquiries and orders delivered on time. It goes without saying, that Germans firms are sticklers for quality assurance. Keeping all these points in mind will go a long way to easing your first steps into a demanding market.
6. What is the standard commission for a Sales Agent in Germany?
This varies greatly from industry to industry and, depending on the typical amounts invoiced, may fluctuate between 1% and 15%.
7. How do I react if a German Sales Agent asks for a retainer?
There are, of course, exceptions that should be considered, but, as a rule of thumb, it is not to be recommended. Generally speaking, any Agent we contact will already be visiting our target clients for his other principals and will only be working a little more to promote our products. He is, thus, already covering his costs and there is no reason why we would be generating extra costs to the Agent.
8. Do you recommend signing an international Agency Contract?
Yes. It is always recommendable, and customary, to sign an agency agreement whatever your target market. It is always advisable to sign a contract from the outset that lays out the conditions you have agreed with your Agent. Without going into details, please note that a contract should be fair to both sides. Draconian conditions are more likely to result in the Agent not signing rather than increasing your sales. On the contrary, there must be mechanisms to control the Agent and encourage increased orders. There is a standard International Agency Contract for SMEs that covers all the obligations and rights of both parties.
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