Expanding into the United States with Sales Outsourcing
In our increasingly globalized economy, going multinational is no longer just the province of huge corporations. Mid-sized and even small companies now have the opportunity to access foreign markets. And one of the biggest of those markets is the United States.
If you are one of the many companies from other countries considering expanding into the United States, you couldn't have chosen a better moment. With a population of 300 million and an economy of $17 trillion, the U.S. offers promising ground for companies looking to access exciting new markets and dramatically build revenue.
Navigating the intricacies of an international expansion involves developing or hiring expertise on corporate and tax structures, market segments, and cultural interchange. One of the most important questions to consider is how you will present your product to the market in the United States. If your product or service is one that can be most effectively presented by a sales representative, you will need a sales team that has an understanding of the needs of the American business owner, and can effectively speak to those needs.
Why Outsourced Sales?
While theoretically you could relocate your current sales team to the United States and retrain them to be effective in the U.S. market, for most companies it makes more sense to hire local candidates who have a native grasp on the language, culture, and market characteristics. However, you'll also likely need to change other elements of your sales function, such as compensation structure, sales training, and recruiting techniques.
A sales outsourcing company can help you not only find and attract good sales candidates who can take your product into the U.S. market, but also build a viable sales function tailored to your company and your U.S. expansion. By using a sales outsourcing company, you take the guesswork out of selling your product in a new market, and benefit from the experience and expertise of a company that specializes in U.S. sales.
Choosing a Good Sales Outsourcing Company
One of the most important things you should know about sales in the United States is that there are two very different ways to hire sales representatives: W-2 (Employees) or 1099 (Independent Contractors).
When a company chooses to hire sales representatives as W-2 employees, they must go through the full hiring process and pay employment taxes for each employee, as well as agreeing to protect them in the event of injury or disability. W-2 employees can be required to work in a location and timetable of the employer's choice. They are often given benefits and a base salary, and therefore a sales team composed of W-2 employees tends to be relatively stable.
1099 Independent Contractors
Independent contractor sales representatives, on the other hand, are paid directly, without going through payroll tax calculations. They can be hired on almost on the spot, and fired just as easily. Companies that utilize the 1099 independent contractor model tend to burn through sales representatives very quickly, resulting in a highly unstable sales team.
Because independent contractors are almost always paid 100% commissions, with no base salary, it is often difficult to convince them to spend their time attending regular sales meetings, for which they are not paid. By law, they are allowed to set their own schedule and perform their duties in their own way, sometimes resulting in sub-par brand representation and uneven performance.
Before you decide on a sales outsourcing company, make sure you know whether the company utilizes 1099 independent contractors or W-2 employees. Other things to check for include how long the company has been around, experience in your industry, and credentials of the principals. At some point during negotiations it is fine to ask for references, but be aware that most sales outsourcing companies sign confidentiality agreements with their clients.
Ready to Expand into the United States?
If your company is getting ready to expand into the United States, Netpique sales outsourcing can help. We offer free consultations to help you determine what kind of sales outsourcing needs your company has. Our services include full, turn-key sales outsourcing, as well as individual services such as recruiting, sales training, performance management, and sales analytics.