Guide to Manufacturers' Agents and Reps

A manufacturer's agent represents your firm and its products, selling your wares in a particular territory. They are your face to current and potential customers. Some will represent your products exclusively; others represent multiple lines in the same industry. Reps are sales experts for a particular industry and territory, often with a built-in following. They are paid based on sales commissions and operate based on a contract.

Here's what to consider when looking for, negotiating with, hiring and working with manufacturers' representatives:

1. Decide whether to hire a number of reps to cover different parts of the country or to use an agency with a staff of representatives nationwide.
2. If you're selling into different channels of distribution, decide if you want a rep to sell into multiple channels, or if you will hire different reps for each channel. The former requires fewer calls to more customers. The latter could increase costs, as two reps may be covering the same areas.
3. Consider how often you'll expect reps to call on customers: The wider the area they cover, the fewer calls to individual customers they can make in a given time.
4. What and sales materials and samples will you supply them with? Or will they have to buy them?
5. Other than receiving orders, what type of reporting do you expect of the rep? Some firms ask for a sales report on each call, others a weekly, monthly or quarterly report. Come up with a schedule and a report format.
6. Do you want/expect your reps to look for secondary markets for your products?

Action Steps
The best contacts and resources to help you get it done

Find a manufacturer's agent or rep through an online search

There are many Web sites where you can enter your criteria and search for a rep.

I recommend: Start by reading Startup Nation's 7 Steps to Finding Sales Reps. Then, search for reps at RepHunter and RepLocate.

Find reps at trade shows

Trade shows provide good opportunities to find reps. Some trade shows have bulletin boards for vendors to post that they are looking for reps, and for reps to post that they are looking for lines. Shop at booths offering compatible types of merchandise that would be carried in the same types of stores where you'd like your goods sold. Many booth vendors actually are rep agencies carrying multiple lines. Sometimes agencies have permanent showrooms in addition to exhibiting at trade shows.

I recommend: Attend gift shows for your trade as one of the best ways to find a rep. Also try craft shows or other trade shows.

Advertise for a rep

You can also advertise for a rep on rep association sites or other relevant trade or industry sites.

I recommend: The United Association of Manufacturer's Representatives (UAMR) bulletin is a good place to advertise for reps, and you can try Global Representation for international reps. See Yahoo's list of trade association sites, where you may be able to post rep ads targeted to a particular industry.

Have others find a rep for you

Ask your current customers for their opinions on who is the best rep working in lines not competitive to yours. If you talk to enough customers, some names will come to the forefront. Or hire a consultant to find the right rep for you.

I recommend: The UAMR offers a for-pay consulting program that prescreens reps to determine if they meet key criteria for representing your products: that they are professional, sell complementary lines, call on a good cross-section of target companies, and are interested in a long-term relationship. They will contact reps for you and send them your brochures, price lists and sales material, and also help you negotiate with them.

Tips & Tactics
Helpful advice for making the most of this Guide

• Remember that your reps are the face of your business. Their success depends on what you do for your representatives and how you do it, and likewise, your success depends on what they do for you and how they do it.
• Do not expect the impossible from a rep or agency. Your customers make the decisions about what to buy and how much they are willing to pay.
• Almost all reps work on commission. Independent reps are paid, depending on the contract, when the products are delivered or when the customer pays for the products.
• Come up with a commission policy that covers the percentage, payment schedule, bonuses for exceeding goals, and how discounts affect their commission. Also consider how you will deal with their commissions upon termination of the relationship.
• Using independent representatives could mean that they are geographically closer to your customers than in-house salespeople.
• Some independent representatives or agencies offer warehousing services for the lines they represent.
• If you have different "confidential terms and conditions of sale" for different channels, keep track of whether the prices vary by channel. If so, be prepared to deal with issues that arise if customers in different channels find they are paying different prices for the same goods.