Selecting an Independent Manufacturers Representative for Your Product
There are several distinct types of Manufacturers Representatives, the combinations are numerous, but to simplify for this discussion the categories are:
- Specialists in Architectural Promotion of new and unique products. These representatives know the Architects in their territory, the type of projects they design and which are appropriate potential clients for your product.
- Specialists in Contractor / Distributor Sales. These representatives have an in depth familiarity with the distributor and installing contractor base in their territory and which firms would be appropriate for your product.
- Specialists Combining Architectural Promotion and Contractor / Distributor Sales. These Representatives have and in depth understanding of the design and contractor / distributor network in their territory. They work on projects from initial design through product delivery and installation.
When looking for a Manufacturers Representative, it is very important to objectively evaluate your firm, it’s image, goals and the product to be represented. Analyze your needs to select a company that has the profile most appropriate to market your product.
Not all products have the same requirements. If you have a mature / commodity product, with many competitors, it is often more important to have a strong distributor / contractor sales force. If, on the other hand, you have a new, unique, unusual or proprietary product, it is far more important to have Representatives that will focus primarily on the Architectural / Design community.
It is interesting to note that many products that start as unique, unusual and proprietary, develop into mature commodity products, which necessitates a change in the marketing and sales approach for the product. It is very important to understand your product and where it fits in the marketing cycle to assure compatible representation.
Both types of products and representatives are valuable and necessary to make our market system work. Our industry is dynamic and it is important for manufacturers to keep up with the changing environment.
Independent Manufacturers Representatives provide a vital service to more than 80% of the manufacturers in our industry, acting as the industry sales force. The synergy of The Representatives Varied Product Lines offers unimpaired access to a broad base of potential customers. They benefit all segments of the Industry;
- Manufacturers: Providing an inexpensive, professional experienced sales force, with NO fixed overhead. The only cost being commissions incurred only after sale, shipment, and in most cases, payment for the material. No sale, no cost. Allows prompt an inexpensive new product introduction and market penetration. Particularly attractive to small to medium sized manufacturers.
- Contractors: Providing the contracting community with new, exciting, innovative products. Increasing the level of sophistication of project materials, raising project dollar value with increased markups and profits for the contractor.
- Distributors: Offering a broader base of available materials. Source for new innovative materials from a variety of smaller manufacturers. Providing identity differentiation form commodity based materials and improved margins. Limited distribution.
Selecting a representative for your firm is as important as selecting a partner. Carefully review their history and accomplishments. Ask other principal companies and representatives from other territories about them, be thorough. Discuss with them their philosophy, make calls with them.
Share your Company Philosophy, Goals, rules and expectations. Keep in mind that they are Independent, do not require unnecessary reporting, and use their time to sell your product.
Thoroughly train them, provide appropriate literature and samples, react quickly to technical questions, offer superior customer service. Be sure to carefully track and report monthly specifications and orders, guarantee the representative credit for their work, pay commissions accurately and on time. Develop mutual honesty, respect and loyalty.
It is interesting to note that the number of Independent Manufacturers Representatives and the companies utilizing their services is increasing. Several companies have a combination of In House Sales People for some portion of the product line and Independent Representatives for other portions of their line.
Unlike many company sales forces, an Independent Manufacturers Representative is generally willing to work on a project that may not ship for several years, or a project “out of territory”, absorbing all of the initial costs until the commission is paid. They are not usually judged upon “inventory turn” or “monthly quotas”, their compensation is simple, no sales no income.
The Manufacturer and the Independent Manufacturers Representative are a powerful team. Together with the professional contractor and distributor, they can help foster professionalism in our industry to the long-term benefit of all.
William L. Shannon CSI, CISCA
President of Shannon Corporation
Recipient of the 2004 De Gelleke Award