A sales representative agreement defines the relationship between a business and its work force. A business’ sales force represents the business to the public. As a result, the people that represent the company and its products and services must be carefully selected, and an agreement needs to be carefully articulated in order to represent both parties’ interests. A written agreement ensures sales representatives promote the business’s products and services to the right people. For a South Carolina small business that is just starting out, an independent sales representative will likely be the best option because an independent sales representative is usually paid on a commission basis and there is no upfront investment. Thus, the independent sales representative is paid only when the company gets paid.
A sales representative agreement outlines the company’s rights and duties. It also defines the individuals and/or organizations that will represent the business’s products/services. It is important that the agreement be reduced to writing because oral agreements tend to be vague and hard to enforce, which leaves open the opportunity for a misunderstanding between the parties.
The terms of a sales representative agreement will depend on whether the business has in-house representatives or independent sales representatives. If the representatives are staff members employed by the business, then the business’s personnel policies will apply. If the agreement is between a company and an independent sales representative, however, the independent sale representative will not be bound by the business’ personnel policies and the independent sales representative is not subject to other duties implied-by-law. As such, an agreement with an independent sales representative needs to be comprehensive, specific, and needs to address all the significant aspects of the relationship.