Frequently Asked Questions
Check the different categories below for answers to your questions.
1. Predictable sales costs that go up and down with sales 2. Standardized sales costs 3. Lower sales costs 4. Immediate market access 5. Broader market penetration 6. More experienced sales force 7. Multi-faceted, multi-skilled sales team 8. Wider, deeper coverage 9. Stronger local relationships 10. Reduced sales force turnover 11. Training required only on product 12. Closer-to-the-customer forecasting 13. Better market intelligence 14. Increased sales 15. Knowledgeable advice and information - hear it like it is! 16. Risk-free exploration of new market niches 17. Problem-solving approach outperforms product selling 18. Vested partner in manufacturer's success.
What are the costs? The rep not only finances the sales, but the commission dollar also covers the cost of recruiting, training, employee benefits, travel, client entertainment, automation, order entry and more. The representative takes on a much broader role than sales alone, whether it's editing, administering and expediting orders, staffing a trade show booth, or handling a customer return.
The ability of manufacturers' representatives to outperform direct employee sales forces starts with the inherent benefits of product line synergy, and continues with the caliber of rep sales personnel. Rep success is directly tied to productivity, so the profession attracts and retains the top talent in the industry - the entrepreneurial, the competitive, the goal-oriented.
Moreover, their success is linked to their contacts with customers and distributors in the territory. Being rooted geographically leads to stability of relationships, an important added value in a world where the customer is king. Another, possibly the most simplistic: the multiple-line sales call is simply more cost-effective. The buyer saves time discussing several needs during a single meeting. Independent contractor sales representatives are not only a source but a resource.
They supply in-depth multi-level inter-departmental coverage, helping to bridge the frequently encountered communications gap between purchasing and marketing. Their advice is cogent because of the familiarity achieved over the years not only with the customer's needs but also with the customer's total corporate culture. Their greater market exposure gives them access to a broader range of information, which they can analyze with objectivity and added perspective.
Unlike distributors, who take the title and add cost to the goods they sell, reps are not an additional channel, nor are they middlemen, channel intermediaries. They are the manufacturers' sales personnel in the territory, simply paid on a different basis - commissions, rather than salary plus incentive plus expenses. In fact, reaching the channel in the most cost-effective manner is probably the most prevalent reason for choosing the rep route - although manufacturers report that their reps bring them many additional marketplace advantages, besides the clear economic benefit of no sales expense until there is a sale.
Manufacturer's representatives are independent professional providers of field sales and marketing services to manufacturers or suppliers. They typically handle a portfolio of related product lines, working under a contractual arrangement within a defined geographic territory, on an exclusive basis within their assigned field of responsibility.