Outsourcing Field Sales – Click here (PDF) Reprints of this article can be ordered from the Foundation for $1 each. Send an email to order.
INTERVIEWING GUIDELINES (Questions to ask a prospective manufacturer) – Click here (PDF)
Planning the Business Year – Available soon (word doc)
Handling Line Conflicts – Click here (word doc)
Creating a Rep Advisory Council – Click here (word doc)
WHAT DOES A MULTIPLE LINE SALES ORGANIZATION DO?
- Provides professional field sales and marketing services to manufacturers
- Works under a contractual agreement
- Covers a defined territory
- Knows their customer base thoroughly since they live in the territory
- Sells synergistic products for more than one manufacturer
- Generates revenue from commissions on sales
Basic economics may drive most manufacturing start-ups to go the rep route…but demonstrated successes keep many using reps. In the electrical and food service industries more than 80% use independent representatives.
The value that manufacturers’ representatives bring to both principals and customers emerges in great measure from the synergy created through the representation of multiple lines.
Their product portfolios allow manufacturers’ representatives to present broad-based solutions to customer problems, rather than the price-and-delivery responses typical to single-product selling. Their consultative approach not only opens the door for other lines, but also adds value and stimulates a partnering relationship with the buyer, as the purchase progresses through an entire project.
Additional benefits to synergy: added market potential, greater market share , and faster market (and account) penetration.
The multiple-line sales professional can afford to call on customers too small to be profitable for a single line. New vendors are introduced to customers more quickly by leveraging the accessibility created by other lines in a rep’s portfolio.
Single-line sales forces, no matter how aggressive and proficient, have more difficulty penetrating accounts.
WHAT A MANUFACTURERS’ REPRESENTATIVE IS NOT
Reps are the manufacturers’ sales personnel in the territory, simply paid on a commission basis, rather than salary + incentive + expenses. They are not an additional channel, nor are they middlemen or channel intermediaries.
With indpendent representatives, there is no sales expense until there is a sale. Reaching the channel in this cost-effective manner is probably the most prevalent reason for choosing the rep route – although manufacturers report that their reps bring them many additional marketplace advantages.
BOOKS, ARTICLES AND MORE RESOURCES FOR MANUFACTURERS
MAKING THE CASE FOR OUTSOURCED SALES REPS
During the economic downturn that most of corporate America experienced in 2001, the following companies had something in common: Intel, Texas Instruments, Cirrus Logic and Hunt Wesson.
What tied them together was their decision to go from a direct (in-house) sales force to a contract, or outside, sales agency for some or all of their major product lines. Two other companies – Motorola and Phillips – chose to use a contract sales force after spinning off a division (the semiconductor operation for Motorola; the Airpax for Phillips).
Making the Case for Outsourced Sales (PDF)
MAKING THE RIGHT REP CONNECTION
When a manufacturer of medical devices was asked if he could confidently enumerate his reasons for working so closely with independent manufacturers’ representatives, he didn’t hesitate for a second. In rapid succession he ticked off his concurrent desires to:
- Achieve immediate territorial coverage
- Impact a niche market
- Realize the benefits of synergistic sales in a cost-efficient manner
According to Geary Havran, chairman of the board and president, NDH Medical, Inc., Tampa, Florida, the above reasons all contributed to the company’s decision to caste its sales lot with independent manufacturers’ representatives.
Making the Right Rep Connection (PDF)
PAVING THE MOST COST-EFFICIENT PATH TO MARKET
“Independent manufacturers representatives provide us with the most efficient and cost-effective
means to penetrate a market.”
In relatively few words that’s how Bob Smith, vice president of sales and marketing, Pass &
Seymour/Legrand, spells out his company’s philosophy for taking products to market. The Syracuse, New York-based Pass & Seymour is a manufacturer of wiring devices for the electrical industry.
Paving the Most Cost-Efficient Path to Market (PDF)
THE ECONOMIC BENEFIT OF WORKING WITH REPS
Although the practice of partnering with independent manufacturers representatives pre-dates their tenure with Cherry Electrical Products, Bob Terwall and Jim Hartranft combined can boast more than 60 years experience working with an out-sourced sales force. As a result, the president and director of sales respectively for the Waukegan, IL based manufacturer don’t have to mince words when talking about the rep experience.
The Economic Benefit of Working with Reps (PDF)
OUTSOURCING THE SALES FUNCTION
Four manufacturers, each serving a different industry and each with different sales needs in the marketplace, have one thing in common. Whether it is the electrical, electronic, medical device or office supply industries, each manufacturer has discovered sales success via outsourcing with independent manufacturersrepresentative companies.
Each company has followed it own lead to achieve the same results—increased market coverage and sales through the use of a network of rep firms.
Outsourcing Field Sales (PDF)