Appropriate Business Model
I am reading and studying the topics you’ve been sharing with us and I want you to help me come out with strategies I can use to attract sales boys and girls to do door to door sales for our products.
We are a start-up and we are into manufacturing of Cosmetics and household Products and the cost of doing advertisements is so high. We intend to get sales boys and girls to employ them to do the sales, but we are not getting enough. Once they show up they stop the work after a few weeks. When we ask them why, they say the work is difficult and we are getting out of business.
Is there any way we can to this door to door sales and keep the people, we are paying them on commission, can you help us with models we can used to run the business? I am from Ghana, west African
I would imagine door to door sales is hard, and staff will only stay with you if it allows them to be adequately compensated for their efforts. Ideally you want a system that encourages follow up sales too.
Obviously, there are cultural differences between Ghana and the UK, so my suggestions may not resonate with you, but I’ll give it a go.
- The downside of door to door selling for the client is that; –
- They may not be in, and have cash available when the salesperson calls
- they have nowhere to go if they are not happy with the product,
- they can’t compare price,
- they can’t buy more when they need it.
The downside for the company is that
- sales are constrained by the points above.
- and repeat sales are difficult to come by
- you have to give enough stock to your sales team to carry with them, so cost of stockholding is high
Can you produce a brochure and order form, leave it at homes, and have the sales staff go back to collect the orders? Then process the orders, deliver the stock and collect the payment at an agreed time. You could ask for payment with the order.
This involves; –
- Cost of producing the brochure
- More visits by sales staff
- Less cost of stockholding
Or maybe you could take a stall at a market or open a store. You could still distribute leaflets and take orders, but clients would be able to place repeat orders.
Why not have a telephone ordering line or accept orders by text or email. You can print details on the brochure you leave at clients’ homes.
Or if there is sufficient internet coverage and expertise, set up a website with online transactions and postal deliveries.
Another popular model in the UK, especially with cosmetics, is a party. The sales person encourages friends and family to allow their home to be used for a party, just some snacks and drinks are provided. They invite their friends to come along and the sales team demonstrate the makeup. Orders are taken, along with payment, and delivered to the customers at a later date. The hostess usually gets some free samples as a thank you. Sales person earns commission.
You may need to pay a small basic salary, to be deducted from commissions earned. So for example they get a basic of 10 dollars a week but earn 40 in commission. They are paid 40 dollars. But if they earn nothing they get 10 dollars.
The other direction you could investigate an established distributor for your products and give them a contract to distribute them. This gives you the advantage of an established network of sales people, leaving you to concentrate on your manufacturing business. Finding the right distributor is not easy. Follow this link.
What do manufacturers look for in a distributor?
I hope some of these models will offer you opportunities.