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How can I minimise risk when dealing with a salesperson?
S.Mutaga III
#1 Posted : Thursday, October 18, 2012 9:48:47 PM
Rank: Member


Joined: 3/26/2012
Posts: 830
I am a university student and I have done a good market research for an urban centre nearby and identified business opportunity.However, I understand that the reason most start-ups fail is because they start big before learning about the market via experience. Starting small with say 1/4 of your total budget increases your chances of success significantly because you will only add stock that has high turnover,and will learn what the market wants firsthand. As a result,I want to start with just 5000,and hire a local trader to sell on my behalf preferably a saleswoman. The saleswoman of choice must have an existing fulltime business so that my merchandise will just be her sidejob. A fruitseller is a prefered employee as my business is not related to hers. I intend to peg her earnings to sales in form of commission which means that she will only make money if she sells my items. What are likely chalenges and how can I avoid them,especially her getting lost with my items......? I cannot monitor her because I will be in school studying.
A successful man is not he who gets the best, it is he who makes the best from what he gets.
Kaka M
#2 Posted : Friday, October 19, 2012 5:04:42 PM
Rank: Member


Joined: 4/18/2011
Posts: 459
Make sure u read the agreement with a magnifying glass or better still a microscope so u can see everything between the lines(Pun Intended)
Anyway, depending on what you intend to sell if the source is only known to yourself or it's readily available there is a risk of the intended sales person restocking with their own money i.e they will learn using your money that this or that product is in high demand and since they have resources,( Time, money etc. after your first stock is finished they will not need you to buy some more as they will do so themselves with their own money.)
You could be a distributor depending on what product it is and once you take it to the retailer they pay upfront you make your small profit and they can make theirs, this cushions u from such issues as nimeuzia fulani ataleta pesa baadaye he/she is a good customer of mine, mtoi amefukuzwa shule na hizo zako ndio nilikuwa nazo nikiuza matunda nitakulipa, ama kanju wamekuja kuuliza licence nikaongea nao etc.
You could also be leaving minimal items with the retailer like 3 units assuming their are that divisible and of lesser quantity then once they have sold you replenish upon receiving cash for what is sold.
Remember there is also the risk of indiscipline on the part of seller, you could go to collect the days sales only to find him/her at the nearest senator den saying am eating my property and singing remixed gospel songs.
Think of relatively low risk ventures like shares where you are already. I know of somebody who when in uni lyk you used to sell flash disks and memory cards and Gor mahia T-shirts which was less headache as he could do the business himself during his free time.
In a certain thread about how guys made their 1st million, one fellow operated bicycle bodabodas when in uni which may not be as lucrative at the moment thanks to the emergence motorbikes but it's not to say it's completely outdated.
Keep your eyes open for various needs that arise in the community that you live and look for ways of fulfilling those needs whether you meet the needs for a short period of time when necessary or longer. This may not be the best example but during a graduation day, it may so happen that there will be need for drinking water and other refreshments which you can ORGANIZE to sell for that day pocket your profit and keep on looking for the next opportunity.
S.Mutaga III
#3 Posted : Sunday, October 21, 2012 11:55:10 AM
Rank: Member


Joined: 3/26/2012
Posts: 830
@Kaka...you just oppened my mind...i would like a daily business,but the idea of the trader selling refreshments for me at the campus gate is a brilliant idea...graduations are usually very few in a year,like three...but I will sleep on that...meanwhile,the reason I want a woman with kids is to eliminate a future competitor...it is obvious that the extra bucks she makes as commission will just improve her living standards or will be spent on the kids,leaving her little or no cash to venture into my line. This will make sure she works for me for a long time before she can accumulate anything...a chic with or without kids or a jamaa is a big NO...a mature woman is the lesser evil. And do I prepare the agreement myself?...
A successful man is not he who gets the best, it is he who makes the best from what he gets.
S.Mutaga III
#4 Posted : Sunday, October 21, 2012 12:00:09 PM
Rank: Member


Joined: 3/26/2012
Posts: 830
@kaka...another measure to reduce her possibility of venturing to my line of business is that her business does not sell items related to mine, and the surce of my items will remain undisclosed as long as I am in that line of business...I will only tell her the source when winding up the business or when relocating to another town...as a kind of 'golden handshake'...if she was a good employee
A successful man is not he who gets the best, it is he who makes the best from what he gets.
richdad
#5 Posted : Sunday, October 21, 2012 2:52:47 PM
Rank: Member


Joined: 2/12/2010
Posts: 474
Location: Nairobi
@S.Mutaga III Others will be watching. Unless your product is very rare, be assured of someone else doing exactly as you will be doing by observing the sales woman.
Keep it simple
S.Mutaga III
#6 Posted : Sunday, October 21, 2012 3:18:02 PM
Rank: Member


Joined: 3/26/2012
Posts: 830
@richdad...i beleive there is enough for everyone...my main concern is retaining the employee...i do not fear competition,but it is worth noting.
A successful man is not he who gets the best, it is he who makes the best from what he gets.
Kaka M
#7 Posted : Monday, October 22, 2012 2:55:04 PM
Rank: Member


Joined: 4/18/2011
Posts: 459
S.Mutaga III wrote:
@Kaka...you just oppened my mind...i would like a daily business,but the idea of the trader selling refreshments for me at the campus gate is a brilliant idea...graduations are usually very few in a year,like three...but I will sleep on that...meanwhile,the reason I want a woman with kids is to eliminate a future competitor...it is obvious that the extra bucks she makes as commission will just improve her living standards or will be spent on the kids,leaving her little or no cash to venture into my line. This will make sure she works for me for a long time before she can accumulate anything...a chic with or without kids or a jamaa is a big NO...a mature woman is the lesser evil. And do I prepare the agreement myself?...


"Trust" maybe be more useful to you under the circumstances than a written agreement, simply because enforcing the agreement in the event of breach won't make economic sense.
Charge a minimal amount to research and development and test the relative honesty of the intended sales person, "Nafula,"
Also minimise your possible losses by replenishing stock once you have received revenues from the 3 items supplied first. I hope you have good margins to compensate for the risks
involved.
digitek1
#8 Posted : Monday, October 22, 2012 3:26:39 PM
Rank: Veteran


Joined: 2/3/2010
Posts: 1,797
Location: Kenya
S.Mutaga III wrote:
@Kaka...you just oppened my mind...i would like a daily business,but the idea of the trader selling refreshments for me at the campus gate is a brilliant idea...graduations are usually very few in a year,like three...but I will sleep on that...meanwhile,the reason I want a woman with kids is to eliminate a future competitor...it is obvious that the extra bucks she makes as commission will just improve her living standards or will be spent on the kids,leaving her little or no cash to venture into my line. This will make sure she works for me for a long time before she can accumulate anything...a chic with or without kids or a jamaa is a big NO...a mature woman is the lesser evil. And do I prepare the agreement myself?...

you seem overly concerned that you will loose even b4 you begin. may have to rethink your mindframe and hence strategy
I may be wrong..but then I could be right
S.Mutaga III
#9 Posted : Thursday, December 13, 2012 1:20:14 PM
Rank: Member


Joined: 3/26/2012
Posts: 830
I started as I stated,with 1/4 of the cash i.e ksh 5,000...biashara za wamama ni 90% credit and you hear more stories than money...i got burned badly...but I was wise to start with just 1/4 of the initial budget....also had an argument with her husband ati nimewekea bibi yake kazi....for Christs sake am 21 and she is about 30...anyway with the remaining 15k,i will search for any biz I can run personally to cut on labour costs.Any wazuan with a biz idea of 15k to a campo student who will work only on saturdays and sundays coz he is occupied with books for the rest of the week
A successful man is not he who gets the best, it is he who makes the best from what he gets.
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