Working with Your Local Independent Manufacturers Representatives Can Increase Your Profits!
Most of our contractor members have had the opportunity to work with an Independent Manufactures Representative over the years. We thought that a quick review of our history and purpose of Independent Manufacturers Representatives would be of interest.
The modern interior construction industry has its roots in the post World War II Era. The architectural acoustical industry was a direct result of the ever-changing building interior environment, creating new opportunities for new product development, manufacture, sales and installation.
The willingness of owners, designers, architects and engineers to seek new answers to old questions and their willingness to try new concepts led to the industry which all enjoy today! Try to picture our industry without the numerous new product introductions that have occurred in the past 50 years!
In the early years of the modern interior construction industry, virtually all new product development was limited to a very few manufacturers, and the subsequent promotion and sale of these products was accomplished through a company sales force and / or certified specialty contractors. There were very few, if any Independent Manufacturers Representatives.
This system was very successful for many years, however in the late 1960’s, as the number of smaller specialty manufacturers increased, a change was needed. The desire for a broader based sales force to bring the many new products to market, became apparent, a single source in a given market was inefficient and limited the manufacturer’s product exposure.
During that time the first Contemporary Independent Manufacturer Representative Firms were created, many by former contractor salesmen, former sales managers or sales engineers of larger manufacturing companies. Today more than 80% of the manufacturers in our industry use Independent Manufacturers Representatives to market their products.
This change in the industry expanded the opportunity for all contractors and broadened the product mix on virtually all projects. Most interior contractors recognize that unique specialty products on projects lead to higher markups, less variable expenses, and a more profitable experience.
An aggressive, Independent Manufacturers Representative is a major asset to the contractor market. They work with Architects, Owners, Designers and Engineers daily, to present new and improved products, concepts and procedures that lead to more profitable projects for the industry. An Independent Manufacturers Representative can be the contractors best friend, and help the contractor increase profits.
In many markets Independent Manufacturers Representatives and Local Contractors work very closely, respecting their individual talents and responsibilities, to assure successful projects for the entire team. In other markets, it is common for contractors to try to offer substitutions for specified specialty products, with the feeling that substitutions lead to increased profits. Perhaps that is the case on an individual project, but it may lead to a lack of future promotional activity by The Independent Manufacturers Representative. Ultimately fewer specialty products will be specified resulting in a long-term reduction in contractor profit opportunity.
In discussing substitutions with a CISCA Contractor member recently, he indicated that it never occurred to him the benefit of specialty products on his projects. He felt that substituting was beneficial to his firm.
In reviewing one of his recent major projects it was interesting to note that when the substitution was submitted it took his project manager eight weeks, three resubmission’s, required three job meetings, numerous conversations with related trades, three shop drawing resubmission’s and payment for the cost of changes to the electrical sub contractor’s custom light fixtures. Interestingly, the substitute manufacturer offered little assistance. The project was delayed, and when the completed the architect and owner were disappointed, and will probably not be future customers.
If The CISCA Contractor had used the specified material, and worked with the Independent Manufactures Representative originally involved in the project, many if not all of his problems would have been eliminated, and the Architect and Owner would be potential repeat customers.
This CISCA Contractor admitted that the lowest material price on this project resulted in increased costs to his firm, with none of the anticipated savings.
The bottom line is that we are all in this together. Our approach to the market sets the level that we all must strive to attain. If we are professional and act as a team, the market will react accordingly. It is incumbent upon the Independent Manufacturers Representative to provide competent professional service to our customers. Hopefully, it will result in the mutual respect we all need to profit now and in the future.
William L. Shannon CSI, CISCA
President of Shannon Corporation
Recipient of the 2004 De Gelleke Award