Factsheet 14 – Do I Need a Sales Agency Agreement?

In practice, the issuing of a sales agency agreement can delay getting started.  The agent might want his solicitor to check your contract out, and come back with issues and amendments.  This will involve all parties in delays and possible expenses.  In theory, at this time there is nothing to protect as the agent has not brought you any customers. Plus it can be expensive: expect a good specialist agreement from a solicitor to cost in the region of £1500 to £3000.

All this might tempt you to skip this stage.

Don’t!

It is vital to get a sales agent agreement in place from the outset, as doing so later on can be tricky and may damage a productive relationship. It’s best to get this out of the way now. Also it forms one of the main terms of reference for the sales agent’s activities, and shows that you are prepared, serious, and professional.

An agency agreement covers:

  • the geographical area or type of customer.
  • exclusivity of area of operation
  • commission rates and when payable
  • the products
  • probationary period
  • termination of the agreement
  • compensation / indemnification
  • supply of sales aids
  • the negotiation limits
  • what house accounts are there
  • paperwork requirements
  • notification of orders placed direct
  • etc

AgentBase supplies a low cost model sales agency agreement, optimised for principals, as part of its Legal Pack.

Working with sales agents can be an ideal way to grow a business or launch a new product with minimal costs. Often sales agents are the most cost-effective, quickest and lowest risk route to market. They may also simply be the best strategy when trying to open up new markets, where pre-existing customer relationships are key.

At AgentBase we have extensive experience of sales agent planning, recruitment and management. Call our friendly staff for a chat about your situation and how we can help you to get the most of out of using sales agents.

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