How a Manufacturer Representative is a Cost Effective Way to Get Products to Market
You’re a manufacturer that wants to start selling in Target or other big retailers, and you have heard that many vendors work with a manufacturer representative to achieve these goals. But what is a manufacturer representative, and what makes them so essential to your success in a large retail environment?
Manufacturer representatives or independent sales reps like Three Sixty Sales are professional sales companies. While they are independent from the vendors they represent in terms of legal entities, they are very much interdependent with the manufacturers they represent. Success for a manufacturer representative is directly linked to, and is in fact inseparable from, success for the manufacturer. Rep firms are paid entirely on commission, so vendors incur no cost to employ the sales force until a sale is actually made.
In addition to working entirely on commission, a sales rep firm will finance the visits, negotiations, troubleshooting and problem solving during a sales cycle, allowing their vendors to focus on their products and their business, all without worrying about whether sales will dig too deeply into their budget.
A manufacturer rep firm exists to provide professional field sales, as well as marketing and consulting services that will help your brand succeed and see real growth for your product. Some sell within a defined geographic territory, while others like Three Sixty Sales focus on specific major retail chains like Target or Kohls. Most agreements with sales reps are on an annual, renewable contract.
It might be easy to think that this annual renewability of contracts means that reps don’t have a long-term perspective when it comes to your brand. But this is a miscalculation. Successful manufacturer representatives are invested in their territory, distributors, categories and manufacturers. They view their manufacturers as long-term commitments, because they are mutually profitable relationships. It doesn’t matter if a sales cycle is long or short. Customer satisfaction is what leads to the next sale for both the rep and the vendor.
No matter the size of the manufacturer rep firm, your representative knows that their income is directly tied to their personal effort and productivity. Their commission and income is proportional to the sales that are made for the manufacturer. Because agreements are annual, there is little risk for the manufacturer, but we’re confident that the value provided will be great enough to keep clients for much longer.
If you’re new to the world of independent sales reps, there is going to be some industry terminology that you’ll soon get used to:
- A Manufacturer is often also referred to as a Factory, Line, Principal, Vendor or Supplier.
- A Distributor is the Channel Partner or Customer that purchases, warehouses, and resells the product. They’ll also help with scheduling, financing and other related services.
- The Manufacturer Representative, also known as Outsourced Sales, Professional Field Sales, Independent Manufacturer Representative, Sales Agency, or simply Rep, helps both the manufacturer and the distributor in a number of capacities that are mutually beneficial to all parties.
By Virtual Monk