What’s in a name?
Does it matter what you call your sales agents?
Let’s take look at the various terms that sales agents are called, and how they’ve evolved over time.
Self employed commission-only sales agents were originally known as ‘ten percenters’. This harks back to an era in the early 20th century where the self employed sales agent’s standard commission rate was always 10%. This was based on standard manufacturing margin of 30%. The 30% was allocated as 10% for cost of sales, 10% for admin etc, and finally (hopefully) 10% profit. Profit margins have become more varied now and predicated on supply and demand characteristics, with commodity margins lower and based on high volumes, and much higher margins for services and more value-added products such as hi-tech phones and computers.
The term ‘manufacturers’ agent’ was prevalent when our economic output was predominantly from making stuff. Since many western countries’ manufacturing has now been outsourced mainly to India and China, less and less manufacturing goes on and economies have become more services orientated. Hence the modern demise of this term.
The term ‘commission’ applies to a wide variety of different things and can be used in different ways. However, it is commonly in use to describe the percentage of the sale value that is paid to a sales person, hence the term ‘commission agent’. A typical commission rate for a self employed commission-only sales agent is in the region of 10% to 20%. However we have seen commission rates range from 1% to 150%. Commission rates tend to be higher for services than goods, as margins are generally higher. Probably because of the alternative meanings of the word ‘commission’, ‘commission agent’ is a lesser used term.
The word ‘rep’ is of course a shortened version of representative. Employed, salaried sales staff are often referred to as sales representatives or sales reps. Hence the transference of the label to the self-employed version of a salaried sales person. However, its important to note that most of the similarities end there. Self employed sales agents behave and perform very differently to employed sales reps, and need to be recruited, managed, motivated and rewarded very differently.
Freelance is a term used to imply that a person is free to do what they wish and work for who they want. But ‘freelance’ is more commonly used in relation to workers who charge a fee or day rate or contract rate for their services, rather than working on a results-only basis like a self employed commission-only sales agent.
Direct sales refers more to self employed commission-only sales agents who call directly on consumers or the residential sector. Other common terms for such sales agents are ‘door-to-door’ sales agents, or ‘doorstep sellers’. More derogatory terms include hawkers, pedlars, or even Nottingham Knockers! Such sales agents used to be commonplace when lots of people were at home during the day. These days most people work and so the chance of finding someone in have decreased. Also, such practices have gained a notoriety due to various scams over the years. Many people are wary and refuse to buy from sales agents at the doorstep.
This is a more modern term that reflects the diversity of what self employed commission-only sales agents sell. i.e. both goods and services. It is a more general, inclusive word.
This is the simplest, most common and straightforward term in use today, and it’s the one we use.
However sales agents don’t only get mixed up with ‘direct sales agents’, but also with ‘estate agents’ and ‘internal sales agents’. Internal sales agents generally work in call centres are employed by a company, and so the term is used confusingly.
And of course, another use of the word ‘agent’ is connected with special agents or secret agents like James Bond. This is an association that many sales agents quite like!
France: agent commercial
Italy: agente commerciale
Spain: agente comercial
America: sales reps, manufacturers’ agents, manufacturers’ reps
The AgentBase Definition
For the record, we use the term ‘Sales Agents’ and define them as self-employed, commission-only, B2B sales professionals.