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I am in a start up with very limited financial liquidity (less than $10,000)

I reached a stage where my online store is taking shape, I have a stock of product now and enough to start a sales team. I advertised on kijiji and crags-list for a freelance sales person and got few replies. At this time I am preparing documentation and sales introductions, etc etc... So would love to get someone to do the sales for me + I hate sales...

One of the resumes was way above my requirement but I thought of meeting this person and see if there is any ideas. We agreed that she will come up with a consultancy program to generate contracts for me but she wants hourly bases + perhaps commission on sales..... She expects things will take perhaps three months to really kick in. (I personally think sales could start any time. Mentioned this because my product is a simple product to order so please do not judge that this person is buying time. My question is different because it will take time to order and deliver, etc, etc, etc.

My question is...

  • How much should I tell her I am willing to pay for hourly bases?(she said approximately 15hrs per week and she looks like she can give good results.)

  • How much should I pay here commissions on the expense of hourly rate? (much preferred)

  • if she agrees on commission, how much should I be looking to pay?(wishful thinking because she looks more a pro than go for pure commission but worth the try)

  • a good question would also be. Should I go for the sales people who agree on commission only? I am sure I can wait few weeks till I sell my 3000 stock or some of it at least.

Details: Turn around to delivery is approximately 5 weeks. If new design is required delivery is approximately 8 weeks. The product is a useful +promotional item. Cost approx $2, whole sales hoping to be $3-3.5.... Retail approx 7-8$ Item is small so handing is nice and cheap.

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3 Answers

up vote 1 down vote

There is no standard agreed upon rate. It is based on: -your location -your product -your market -the consultant's experience -the consultant's perceived risk -the associated marketing investment -the brand equity -the market and brand foot print of your competitors

I could go on. . . . All of these determine the" price" -in the end it is what you can pay and what the consultant will work for.

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Jo. 100% correct I should know best so I thought out of my engineering box. simple: let her tell me what she wants:) I told her: Short term i want: 1-executable plan to sell stock (3k pcs) with max revenue (sales team in car parks, malls, etc, etc). 2- generate sales contracts for closure purposes (i can do) 3- signed sales contracts 1st month must cover commissions. for me: 2 months for deliver so $$$ should be enough to wait 1st collection. 1 month is enough to decide if she is worth the money. long term; sales department distribution channels, etc 10K will never take me to retirement – ramzi Aug 27 '11 at 17:05
up vote 0 down vote

You should base your answer on the capital that is available to you, as of right now. You always have to predict the "what if" the business doesn't work as well as you expected it to. First of, I don't see why you have to hire anyone as of right now. Try selling it by yourself, I am sure you can present the product better that any sales person would. BTW, you should give a bit more info, on what it is you're selling, and judging by the way you protect your product, you should invest into purchasing copyrights for it (if you have invented it).

On topic now, how many sales do you expect to have? Hundreds, thousands? Also, if she is a freelancer, its better to keep her on a commission only. Explain it as a probation period, say, for a month or two. Then, see how the sales go. In my opinion sales people work best when they are on commission only. Also, how do you plan on selling your product? door to door? cold calling...?

P.S. Most of the time you have to get your hands dirty if you want your business to prosper. Meaning, "+I hate sales" won't do. You have to prepare yourself for the worst case scenario and work for the best ;)

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thank you bcllc for your input. I am not avoiding sales nor wanting to throw my money on someone just to avoid it. I would like the to know what is the hourly rate for a marketing consultant. Perhaps I went into too much detail and I should rephrase my question. – ramzi Aug 26 '11 at 11:10
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Hi bcllc. I always heard this comment. "you have to go sell. just do it". I find myself now understanding why I avoid it. simple; I am bad at it. to me it is just like telling a sales man to engineer a component, the die, the package, etc, etc. I personally think sales is as important as engineering and one incorrect sales channel will give damaging result. this is why marketing and sales is crucial short and long term. at the end of the day $10K is not going to take me to retirement so let it be the point of no return. 100 unproductive hrs from me is more expensive than 20 from sales expert. – ramzi Aug 27 '11 at 17:24
up vote 0 down vote

Selling is one to one. Marketing is one to many.

Leverage and see better results by marketing. You can set up a website which showcases your product/service. Optimize the website SEO to get a good page rank if you have to, but pay close attention on traffic behavior. Are they buying or not?

From this perspective, you can hire someone to manage the marketing aspect of your website. This person will monitor site metrics -- how much traffic are you getting, where are they coming from, bounce rate, etc.

If budget is a constraint (as it always is), outsource this job. You can get a marketing assistant for as low as US$3/hour, plus, you can put a cap as to how many hours they need to work on your project each week. For marketing experts/gurus, you will have to shell out US$10 or more per hour. There's a lot of talent on odesk that can help you with almmost every aspect of your business, and at an affordable price.

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