Advice for Sales

[arcola]

Hi all,

I am 24 working as a retail manufacturers rep. I got the company I work for (a US factory that makes consumer products) into 3 huge retailers (one of them is Costco Wholesale). From 0 last year with those accounts we are at over $1.5 mil.

My problem is while I have a hand shake deal with the owner, and he is a business owner with a very high reputation for honesty and ethics, I don't have anything in writing. The owner wants to base everything off of our relationship and our hand shake.

Does anyone have any insight into hand shake deals that have turned out ok? Or do I really need to start looking at convincing him to do something in writing?

 

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[AlphaWulf]

I think you should have something in writing. Even if it's a quick note on a napkin signed by both of you. That holds up better than a handshake that did or didn't happen.

 

[Scot]

Can you go into more details? Who's the handshake with, your boss or a new retailer?

If it's a new retailer, handshakes don't mean squat without a letter of interest or purchase order.

If it's your boss, what's the handshake on? Money or commission? Because I certainly hope that's in writing! Verbal contracts vary from state to state as far as validity. But you have to look out for yourself 100%.

Always get stuff in writing. It doesn't have to be a contract even. Just sending an email like "hey bob, just wanted to confirm what our agreement was on the Costco deal? Did we agree on a 5% or 7% commission?"

That way, if you're worried about insulting him, it's a roundabout way to get it in writing. Do communication via email or text, create a paper trail. If he tries to screw you down the road, at least you have a digital record of your agreement.

 

[Andy Black]

I must admit I don't do written contracts. I figure that a piece of paper won't stop them screwing me if they've a mind to.

I setup the relationship where they physically can't screw me - like insisting on getting paid in advance for instance, or not giving logins to what I build for them.

Could be a blind spot for me, and your mileage may vary.

Hope it helps anyway.

 

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[ApparentHorizon]

Hi all,

I am 24 working as a retail manufacturers rep. I got the company I work for (a US factory that makes consumer products) into 3 huge retailers (one of them is Costco Wholesale). From 0 last year with those accounts we are at over $1.5 mil.

My problem is while I have a hand shake deal with the owner, and he is a business owner with a very high reputation for honesty and ethics, I don't have anything in writing. The owner wants to base everything off of our relationship and our hand shake.

Does anyone have any insight into hand shake deals that have turned out ok? Or do I really need to start looking at convincing him to do something in writing?

Agreements over email can be legally binding and enforceable in the US.
I'm not a lawyer and this shouldn't be taken as legal advice.

 

[JAJT]

Are you getting paid as promised, on time and in full?

If so, I'd suggest you assume he's an honest guy and press forward with continued trust. If he screws you even once and you don't come to a quick and amicable solution - move on.

A handshake can be worth a lot, or nothing. It's kind of a judgement call.

 

[Denim Chicken]

https://www.reddit.com/r/sales/comments/58aodn/tips_for_being_a_smart_independent_rep_dont_get/

If you're working with those kind of numbers, your commission must be high which means you need a contract, period. Position it in a way where he doesn't get offended to sign one but i would never work without a contract. It doesn't matter until it does. then you're out a lot of money. and unless you're making a very small amount it's high enough to be law suit worthy.

 

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[PaulRobert]

IMO, when anything above $10K starts to happen, there needs to be a paper trail of some sort.
Even though he may be honest and ethical it's always better to have something on paper.
An LOI, PO, or email is still better than a simple handshake.

 

[Jon L]

Who does the owner want to shake hands with? Costco? I'm surprised Costco is ok with that? Or was it with you? If its you, then, get it in writing, without question. Just a simple 1 page contract is by far better than nothing.

An experience I had:

"I'm going to give you 20% of the company" said a customer who was going to pay me a reduced rate.

Several months later, after I had done a bunch of work, I said, 'lets get this in writing'

"Oh, I meant 20% of the profits. You're not going to have equity"

then a few weeks later:

"For the first year"

That only happened because I stuck to my guns and demanded a contract. I should have done that as soon as he said, '20%'

We ended up parting ways.



...

That's just one example. I have more. I'm sure others have much worse horror stories.

I have a 1-page contract that isn't in legalese that would work for you. PM me if you're interested. Its certainly not air-tight, but its by far better than nothing, and won't scare him off if he's contract-averse. It will serve to scare him off, though, if he's wanting to leave room in your relationship to screw you.

 

[Denim Chicken]

You see this on all levels of sales, even on the sales floor. Words and contingencies change when money is real, it's human nature. It's easy to promise 20% but when 20% of a million is $200,000 and the deal is done, people dont want to share it. Contract.

 

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[Andy Black]

Who does the owner want to shake hands with? Costco? I'm surprised Costco is ok with that? Or was it with you? If its you, then, get it in writing, without question. Just a simple 1 page contract is by far better than nothing.

An experience I had:

"I'm going to give you 20% of the company" said a customer who was going to pay me a reduced rate.

Several months later, after I had done a bunch of work, I said, 'lets get this in writing'

"Oh, I meant 20% of the profits. You're not going to have equity"

then a few weeks later:

"For the first year"

That only happened because I stuck to my guns and demanded a contract. I should have done that as soon as he said, '20%'

We ended up parting ways.



...

That's just one example. I have more. I'm sure others have much worse horror stories.

I have a 1-page contract that isn't in legalese that would work for you. PM me if you're interested. Its certainly not air-tight, but its by far better than nothing, and won't scare him off if he's contract-averse. It will serve to scare him off, though, if he's wanting to leave room in your relationship to screw you.

What a scumbag.

The only times I've been screwed there were contracts in place and they just didn't pay me.

 

[Jon L]

What a scumbag.

The only times I've been screwed there were contracts in place and they just didn't pay me.

yeah...I think for smaller jobs...say under $5 or $10k, operating without a contract is fine. For larger ones, a contract helps clarify things, and it reminds participants what they previously agreed to.

 

[lowtek]

what's the point of a contract? It's to have something you can enforce in a court. If the deal is so small that you would spend as much, or more, in lawyer fees, I don't bother with contracts.

Four figs to low 5s, I don't bother.

If we're talking high 5 figure, 6 figure realm, a contract is probably a smart idea.

One thing I've learned is that calling a contract a "service agreement" reduces resistance. People are averse to contracts, cuz we get screwed by signing contracts with cell phone companies, cable companies, etc. A service agreement sounds much more gentlemanly and doesn't elicit a gag reflex.

You can change the verbiage, but I would call it some sort of agreement rather than a contract.

 

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[arcola]

Thanks for all the advice

No the hand shake deal is between me and owner

We have no contractual set up with Costco just receive purchase orders and produce

 

[Jon L]

Thanks for all the advice

No the hand shake deal is between me and owner

We have no contractual set up with Costco just receive purchase orders and produce

The PO likely references a standard terms and conditions sheet...and you agree to that contract when you agree to the PO. It might not, but I'd be surprised if that were the case.

Contracts are expensive to enforce, and therefore won't be enforced unless you're talking about large sums of money ... but the advantage of them is that they clarify things for both parties ... "is that really what I meant to say?" ... and in a situation like yours, where your livelihood is on the line, I would at least email him and say, 'just clarifying that this is what we agreed to: [and then list out everything you guys agreed to]'