On the one hand, you’ve got some manufacturers that look at contracting with independent manufacturers’ representatives as more than just outsourcing sales. On the other hand, you’ve got some manufacturers’ reps who resent the fact that more and more responsibilities are being relegated to them — not always accompanied by commensurate compensation.

What some of these manufacturers are doing is handing over their marketing and sales duties to reps. Here’s how one manufacturer views that scenario: “They don’t just delegate the job of selling into a particular territory to a rep — they dump the whole marketing and sales process in his lap and expect miracles. And, when miracles don’t result, what do you expect their reaction is? Those companies abdicate their fundamental marketing and sales responsibilities because they believe guiding the process is just too expensive or too hard. It’s the lazy man’s way out. Short-term, you avoid a lot of time and work. Long-term, you perform a disservice to yourself, to your company and to the reps who are involved.

“That type of thinking continues along these lines: ‘That’s what we’ve been doing, and it works fine.’ Well, I’ve got news for you — just about every sales manager in the world thinks they’re doing a great job, regardless of the bottom-line results. In truth though, many of them are astonishingly uninformed.”

“By continuing along with this process,” he continues, “a number of (bad) things can and often do occur. For instance:

• You wind up prematurely severing relations with one rep and replacing with another — never really achieving the results you desire.
• You never achieve the market share you could and should be shooting for.
• You really never get a feel for how your business is performing. You actually have no idea if there’s a germ of a good idea in your marketing strategy.”

What this manufacturer advocates is to choose your reps carefully, communicate with them and support them to your fullest. And listen to what they report from the field. “Remember — you hired them to be your eyes and ears. Let them tell you what they see and hear.”

Ideal Rep Attributes
There was a recent trade magazine article entitled, “What Manufacturers Want from Distributors.” When we discussed the subject matter with a manufacturer, the discussion almost immediately turned to what manufacturers value in their rep sales force. In the opinion of this one manufacturer, here are some of the attributes he looks for in a prospective rep:

• Self-motivation — “I never want to wonder what my reps are doing. They shouldn’t need me to be calling them asking what they’re up to. Rather, from the moment they put their feet on the floor in the morning, they ought to be following the path they’ve paved for themselves.”
• Never let “no” get you down — “If a rep allows himself to be discouraged by customers saying ‘no,’ then that’s not the rep I want to partner with. The word ‘no’ should serve as a motivating source — spurring them on to their next prospect.”
• Relationships — “A rep has to have a winning personality. People like to conduct business with people they like. If the rep has the type of personality that allows him to establish strong relationships, he’s going to be successful in his territory.”
• Empathy — “The rep has to possess the ability to feel the customer’s pain. If he can do that, he can anticipate and meet the customer’s needs with regularity.”

Interview Questions
That same conversation with the very same manufacturer evolved into one that then took into account the kinds of questions that manufacturers ought to be asking prospective reps before each signs a contract. Right off the bat, the manufacturer noted, “I’ve naturally got to get an immediate handle on things such as how and why an individual became a rep, how long he has been in business, what number of people make up his agency and what lines are carried. In addition, however, I also want to know:

• What about the future? Do you invest in your future? What role does technology play in your future?
• Will my line enjoy a synergistic fit on your line card?
• Will your agency have one or more people who I can point to as the experts for my line?
• Where will my line rank on your line card?
• What do you need/require/want in terms of support (from me) in the field?
• I’m a big believer in membership in industry associations. What industry associations (rep and otherwise) do you participate in?

It’s only after questions such as these are asked and answered that I feel secure in partnering with a rep firm.”

Two Sides to the Interview
As a rep was describing the multi-step interview process he was presently engaged in with a prospective principal, he stopped for a moment and commented, “You know, I’m appreciative of the fact that I’ve got to put my best foot forward with this manufacturer. It’s a line that would truly benefit my agency and strategically position us to grow as I envision. At the same time, however, I hope the principal realizes he’s got to do everything he can to make a good impression on me. I’ve got all it takes to make this work in my territory. I’ve been in business for more than two decades. I can boast deep and strong relationships with customers and prospects, and I’ve developed a reputation as someone who knows what’s happening in the territory.

“I mention all this because I’m not afraid to walk. If I don’t think it’s a good fit and the manufacturer isn’t honest about the commitment it will take to make it work, I’ll look elsewhere.”

So far, he admitted, “everything has gone well, but now we’re at an important point in the getting-to-know-each-other process. For me, here’s what’s important as we continue. When the manufacturer meets with me, he must realistically and fairly present his company by detailing his goals and how he’s going to support my efforts. He’s got to identify key elements he’s looking for in our agency. He’s also got to be prepared to discuss required compensation, and company management culture.”

He added, “While I know the impression I make on him is important, he’s got to realize that I’m evaluating him in the same manner in which he’s looking at me.”

The Grass Isn’t Always Greener
The cloud of poor-quality goods and accompanying recalls continues to cast a shadow over many manufacturers’ efforts to outsource to China, according to an article that appeared on the CNN website earlier this year.

Citing the example of one entrepreneur who outsourced production to mainland China, the article pointed out how in this case mistakes and poor quality combined to almost drive the manufacturer out of business. That manufacturer’s problems “may seem trivial compared with the potentially deadly output of Chinese factories that has paraded across the headlines — including 1.5 million toy trains coated with lead paint and 60 million containers of toxic pet food. In July the Food and Drug Administration banned shrimp and four species of contaminated farm-raised fish from China.

“Suddenly, outsourcing to China — standard procedure for thousands of entrepreneurs — looks a lot more complicated. Now businesses must factor in the true cost of obtaining their products at the world-beating ‘China price.’ After the recalls, says Andrew Bartolini, an expert on global sourcing at Aberdeen Group, a research firm in Boston (aberdeen.com), ‘There’s an understanding that low cost comes with risks.’

“Even big companies have trouble dealing with the fallout from defective products — unsellable goods, bad publicity, recalls, and crippling litigation. For example:

• Menu foods, a $303 million a year company with more than 1,000 employees, spent $38 million recalling melamine-tainted pet food.
• Foreign tire sales, a 13-employee importer based in Union, New Jersey, says it faced a $90 million price tag for its recall — and possible bankruptcy. The company, which sold only 700,000 tires last year, must replace 450,000 tires made by the Hangzhou Rubber Company because many have dangerous defects.”

The article continued that the cloud over Chinese goods “does have a silver lining. Some Americans are shopping harder for goods that say ‘MADE IN THE U.S.A.’ And the nightmare scenario playing out has alerted business owners to be more aggressive in managing their Chinese connections. They must imitate the ways in which multinationals control supply chains,” says Bill Primosch, senior director of international business policy at the National Association of Manufacturers (nam.org).

“Unlike big companies, most entrepreneurs can’t afford to put employees on the ground to watch the assembly lines. But a growing cottage industry of consultants specializes in managing overseas manufacturing contracts,” says Bartolini. Many will help find a sourcing partner. Others can inspect goods at the factory and arrange shipping. Some handle everything, from selecting an industrial designer to overseeing quality control, even assuming liability for a factory’s output. “Sourcing consultants earn their income by marking up products, but the client can still come out ahead because these sophisticated players have connections for factories that other consultants and brokers don’t,” Bartolini adds.

“As with Chinese sourcing partners, the quality of middlemen varies. ‘There are a lot of cowboys — lone brokers with websites — some of whom have never even been to China,’ says Christopher Devereaux, managing director of China Savvy (chinasavvy.com), a sourcing company based in Hong Kong. ‘To find reliable middlemen, Devereaux says, check with other importers and trade associations in your industry.’”