Question

1. Discuss the benefits and disadvantages of using a 3rd party to sell your product versus a company’s own sales force.

Answer 1

Benefits of appointing 3rd party in the sale of a product are the following:

1) Appointing staff's in the Sales department can be expensive as compared to engaging a deal with the 3rd party agent,

2) 3rd Party agents will be experienced and do not require additional time or cost (such as recruiting, training, payroll cost, low risk etc)

whereas in house sales department incurred many expenses and are time-consuming (monthly salary, bonus, commission, other perks and benefits etc)

3) 3rd party are more reachable to clients since they are working in this field for quite a long time.

On the other hand, this client reachability is limited in-house sales team.

4) 3rd party has higher credibility since years many buyers knew them and intends to buy from them, whereas in-house salesperson will have a lower credibility

Disadvantages of appointing 3rd party are the following:

1) When you enter into a contract with 3rd party agent you might be one among their hundreds of customers they deal with.

Thus you might lose control in the market

2) You will not have direct contacts with the customers.

Thus tailored made demonstration and promotions cannot be directly engaged with.

3) They might not completely understand your product, and they might sell the products to unsuitable customers