Atomic Company Case Study

convey to a lucky series of events, nuclear Company has enjoyed a sharp increment in gross gross gross revenue of their Tiger gasp line. The most obvious and immediate pains being felt by trouble is the inability to omen prospective gross sales and the gritty tot up being paid taboo in sales fit outs. duration these argon legitimate concerns, I reckon deeper problems exist. The contemporary sales structure divides item-by-item sales vocalizations into different return lines and territories. This actor that an nuclear Company retail merchant carrying intravenous feeding or five different nuclear product lines would wear four or five different sales representatives. non only that, independent sales representatives typic eithery confound a fairly graduate(prenominal) turnover rate in the indus shew, which means that relationships with nuclear retailers suffer. With this structure, its difficult to depict a full check of a retailers channelise ups. I n lodge to place an order for atomic clothing, the retailer has to go by means of multiple people. With high turnover, it could mean that a retailer has to dress with a raw sales rep e rattling form sometimes more frequently. Its difficult to estimate future sales because sales reps dont have a big picture view of retailer needs.More importantly, nuclear Company is not encouraging amply committed relationships by creating quantify, executeing expectations, or building trust (Cron & DeCarlo, 2009). An added issue meet sales structure is that commissions be focalise up so that sales reps locomote rewarded with high commissions for orders from lively taradiddles. If the sales reps are take a crapting orders from a stake corresponding the one just undergo, they may not care to go out and convey immature business or cling to existing accounts since theyve already met their personal commission goals. Alternative Courses of Action 1.Develop a sales structure where a greater phone number of territories are created for independent sales representatives. Keep the commission at a flat 15 percentage. 2. Transition into a society sales force for each product lines of nuclear Company, including Tiger Pants. machinate payment at $40,000. Reduce the commissions to 10 percent for sales from the first year of sensitive retail accounts and five percent of immature sales to existing retail accounts. Further, set up a expressive style for existing accounts to place straight rebuys straight with the accompany that sales reps would receive cardinal percent commissions. 3.Maintain status quo, sticky with the current structure for independent sales representatives and commissions. Analysis of Alternatives 1. By increasing the number of territories and then assigning one representative to each territory for each(prenominal) equip lines, reps get out be able to revolve around on building relationships with retail stores. from each one rep give have a good idea of the total amount of atomic apparel being purchased by their retail stores, along with opportunities to expand miscellaneous lines. They bequeath understand their customers and be relegate able to predict future sales because they go forth have developed a relationship with store managers.This approach depart simplify the purchasing procedures and create quantify for retail stores since they leave behind only need to place one order for all atomic products. The number of sales calls will decrease, level of communication will increase, and overall expectations will be met at a much higher rate. Commission range would be kept at the mutual 15 percent so current independent sales reps working with Atomic wouldnt have to adjust to a new pay structure. More importantly, Atomic wont have to essay losing their current reps and have to go through the hiring process or risk rupture to current accounts.The downside to going with this approach is that Atomic C ompany may end up spending more than they should on sales commissions. Fifteen percent is a very high rate and really starts to take its toll when sales spike ilk they did in the case of Punk totter academy. Further, independent reps are less devoted to the company, leading to higher turnover range and, ultimately, impaired retail account relationships. 2. Hiring company sales reps and separating them out into defined territories for all Atomic Company product lines will provide each of the benefits stated above.Additionally, company sales reps will feel a higher sense of commitment for Atomic and the accounts they serve since they will be receiving a salary with commissions tie-upd on performance. The way the commission structure is set up, at that places incentive for sales reps to try to identify opportunities for new business. If a blank space interchangeable to Punk shake up Academy arises, sales reps will still get some commissions from their existing retail account s without get bogged down with administrative tasks. Straight rebuy orders will be processed internally, allowing reps to focus on generating new sales.A downside of going with this new structure is that there would be a signifi johnt adjustment period for new reps to get leased and become old(prenominal) with retail accounts. Additionally, an investiture would have to be made in providing office space, equipment, training, and an employee benefits package. 3. adhesive to the status quo will produce results similar to what have been achieved to-date. While the company has familiarityd success with it, recent developments with Punk Rock Academy have proven that it is flawed. mugwump sales reps dont have a fully vested interest in Atomics success.This structure excessively exploits it difficult for true relationships to be create with retail accounts. Finally, commission rates are structured in such a way that there is not a lot of incentive to develop new retail accounts as l ong as business is booming. The minute fads change, however, reps will be set back and will have to scramble to make up for the exit in sales. Recommended Course of Action Although reverse the entire company and all product lines over to internal sales reps would direct a signifi ratt initial investment of time and money, it will be expenditure it in the long run. My recommendation is to go with option two.Overall, this course of action will put the focus back on forming account relationships that will create value and allow Atomic Company to meet the expectations of their retail outlets. More in-depth knowledge of accounts in smaller territories will make it easier to predict future sales, especially when a spike in sales occurs. Retail stores will provide excellent input on consumer behavior since they know their client shew and can use past experience as a reference. The rewrite salary with commission structure will assist reps balance out serving existing accounts with fi nding new business.A base salary will help take sales reps since they wont be worried about facing months when sales might be a pocket-size slower. Implementation/Action Plan wholly existing independent sales reps should be alerted as soon as possible that effective the first of third quarter, Atomic Company is making a defeat to inside sales representatives. All reps with a solid track record would be invited to continue on as a full time employee with salary and revise commission structure. Reps would have two weeks to make a decision on their intentions to brook with the company.If individuals choose to leave, they would be offered a reward if they stay on contract until the beginning of the fourth quarter. by and by two weeks, Atomic Company will have a sense of how many new sales representatives will need to be engage so they can begin the recruitment process. Formal salary and commission structures will be set up and the VP of sales will develop a muster out plan f or sales training and account relationship management under the revised territories. Benchmark sales goals, objectives and strategies will be written out to fall in line with overall company goals.After the first quarter under the new structure, management will need to appraise progress and adjust as needed. accident Plans If timing doesnt allow for a quick implementation of the new sales structure, a hybrid approach can be taken. The eastern territories can be broken down into smaller areas and inside sales reps can be hired to manage those accounts. Meanwhile, the central and western territories of the U. S. can maintain use of independent sales reps for various product lines. This could be a good opportunity to test out the new structure to see how rise up received it is by retail accounts and how it impacts overall sales.