How to Work with a Manufacturers' Rep
Are you a small business owner trying to figure out what type of sales staff to hire? A manufacturers' representative could be the perfect solution for you.
Manufacturers' representatives (or reps) are independent salespeople who work for a variety of client companies and typically sell business-to-business. Reps generally focus on a particular industry, such as automotive parts or medical equipment; within that industry, they represent complementary (noncompeting) products sold by different companies.
Are Reps Right for You?
Manufacturers' reps can be a smart option for a small business for several reasons. First, since they're paid solely on commission, they are more affordable than an in-house sales staff. Because they work from their own locations and don't require office space in your business, they're ideal if your company is virtual or home-based.
If you're a startup or young company, or are introducing a new product, reps can help your company gain a foothold. Because they have vast networks of contacts and knowledge of your industry, they can serve as a conduit to new opportunities.
At the same time, keep in mind that reps want to represent products that sell well. If your company or product is relatively unknown, you'll need to spend some time building your sales to a respectable level before you approach a rep. Start small and focus on increasing sales in your local area until you can prove to prospective reps that there's a strong demand for your product.
What to Look for in a Manufacturers' Rep
In addition to specializing in particular industries, manufacturers' reps generally focus on one region of the country or (if they sell globally) on particular countries. You may also find reps who specialize in selling to mass-market retailers and others who specialize in selling to independent stores or smaller chains. Before seeking a rep, decide where and how you want to sell or expand, and look for reps who can help you achieve that goal.
Where do you find potential manufacturers' reps? There are several places to start:
- Get referrals from colleagues
- Ask buyers for recommendations
- Attend trade shows
- Advertise in industry magazines or websites
- Contact a manufacturers' rep association (The Manufacturers' Agents National Association website is a good place so start; there are also industry-specific rep associations.)
When you find a rep you like, make sure he or she is not carrying too many product lines -- you want a rep with enough time to focus on your product. Also make sure the rep isn't selling products that are competitive with yours. It's crucial for the rep you choose to be trustworthy and reliable, so contact references and use the Internet to research the person's background and reputation.
(Read Hiring the Right Salespeople for more on what qualities to look for in a rep.)
Since manufacturers' reps are independent contractors, you can't directly control how they perform the job on a daily basis. (For more on how to get the most from independent contractors, read Managing Independent Contractors.) To get the results you want, it's important to have a thorough and well-written contract. The contract should clearly spell out factors such as duties, expectations, how performance will be evaluated, the rep's territory, and how the rep will be compensated.
Also be sure to specify under what circumstances the rep can be terminated; otherwise, you could end up stuck with a non-performing rep.
Once you've signed a rep, work to maintain a good relationship and keep in contact with your rep regularly. Frequent communication with your rep not only boosts sales, but can also give you valuable industry insights and leads on opportunities you might never have known about without the help of your manufacturers' rep.
