Representatives National Resource Center
The Upsides and Downsides of Selling Your Products
and Services through Manufacturers' Reps
Advantages of Selling through Manufacturers’ Rep:
Costs Are Back-Loaded: Other than your investment in recruitment, support tools, and training and orientation, all other costs of selling through manufacturers' reps are back loaded. You pay your manufacturers representatives a commission on paid invoices. When business is up, you pay more in commissions. When sales are down, the cost of your manufacturers' reps decreases.
You Inherit the Rep’s Customer Base: Reps come with an existing base of accounts that have been buying from that rep for years, maybe decades. No newly hired company salesperson has that going for him!
Reps Create Synergy: A rep has an existing account that’s developing a new line of products that require the parts you make. You might never have found that prospect on your own.
Reps Provide Field and Competitive Intelligence: Reps are out there on the front lines every day, and they are street-smart. They can be an excellent source of industry and competitive intelligence, and a resource for product improvements and new product development.
of Selling through Manufacturers’ Reps:
Reps Are Independent Businesses: Just as you have little influence over what customers or resellers do with your products, reps will do what they believe is in their best interests. That can, however, work to your advantage!
Reps Have Shared Loyalties: You will never get a rep’s complete and undivided attention because reps must split their time and resources among several principals. That means you must compete against your conventional competitors, then compete for each rep’s time, talent and resources against his other principals!
Give Up Considerable Control: If you need control (for
example, you sell through distributors, and you need to know where your
products are going and what they are holding in inventory), you will not
likely get that type of enforcement and feedback from a rep. Better hire
a direct sales force!