21 May WHAT ARE THE IMPLICATIONS OF USING INDEPENDENT REPS FOR WORLDWIDE?
Worldwide is introducing a new type of wire which will double the amount of data carried over existing wire. It uses a specialized material that customers will be unfamiliar with. Worldwide estimates that its salesforce will need to spend an additional one and a half hours per account per quarter introducing the product and training customers on how to integrate it into their products. Recognizing the amount of time its reps spend on non-customer tasks, Worldwide is investigating some process improvements that would reduce the time reps spend on non-customer administrative tasks by a quarter. With the new product, Worldwide expects total annual sales to be about $26 million. (Hints: Make reasonable weekly hours and vacation time for Worldwide’s reps. Think about where you would allocate the customer-related emails and phone calls. Note that sales force size analysis is usually done on an annual basis.)
How many sales reps should Worldwide have before the new product addition?
How many would they need with the new product and sales process improvements?
Worldwise is concerned about the financial implications of adding this new product and has asked the sales department to consider using and independent sales agency to reduce expenses. If the agency is paid 8% of sales, what sales volume would be required to justify this choice?
What are the implications of using independent reps for Worldwide?
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