One of the feature articles this month is about developing new markets and territories. The thrust of the article is that manufacturers’ reps of today need to be developing new markets if they are to succeed and grow. When you develop these new markets, potential principals will typically have no existing business to turn over to the rep. The reality is that it always takes more time for the rep to develop new markets, and more time equates to more cost. Why should the manufacturers’ rep take time away from helping customers who already provide income to the rep, in order to work where the income may only possibly come sometime in the distant future?
Developing new markets is a risk. What if the company that wants the manufacturers’ rep to invest their time and effort goes out of business or gets sold to a new owner who has different ideas about how to set up the sales force? In these cases, the rep will have made a substantial investment in the territory for which there is no return, causing a loss for the rep.
For many years, manufacturers’ reps would not take on missionary lines because of the costs and associated risks. Fortunately, more creative people have come up with ideas that help share the risk and cost of pioneering, so the results can be win-win for both parties. As a result, more manufacturers are able to enjoy the benefits of outsourcing the sales function. Conversely, manufacturers’ reps are able to take on the pioneering efforts of some good products with a much higher probability for return on their investment.
For those who believe manufacturers’ reps should get paid commissions only, regardless, our recommendation is to maybe rethink that position. There’s no doubt they will be able to find a rep to take on the line, but they need to ask themselves, “Is this the most effective manufacturers’ rep business I could have signed up?” Think of how much additional business a more professional rep could have brought in. Investing a few thousand dollars a month for a year to work with the professional rep, likely would have brought in much more business. By the way, that’s far less costly than hiring direct salespeople.
You’ve already invested a great deal of money on product development, factory and equipment and fixed cost of salaried factory personnel. Why would you not be willing to invest a little up-front cost in each sales territory to get the best available sales firm? Earning the business is 50% of the battle today, and you want to invest 0% of your total capital in that area? That does not make much sense.
Keep an open mind, and build an arrangement that works well for both of you during the pioneering stage. The result could turn out to be a long-term, mutually profitable relationship for both of you. It doesn’t get any better than that.
It’s very exciting and equally motivating for a representative to embark on the chase of a new market and/or a new territory. It’s what most of us live for. Well, the monetary payoff is the real reward, but the chase is our game. Manufacturers know this and will dangle the potential reward of future commissions in front of our eyes to reel us into their service. We frequently take their bait, but at what cost to the principal and to the representative? I believe that, years ago, the chase was easier than it is today. Not because I was younger … Read the rest
Time and money have become short for reps and manufacturers, but investing some of both will lead to a more secure future and an increase in customers. Not only will it be worth it, it will be necessary.
Diversity, growth, expansion and sound business planning are the words that come to the fore when consultants to the rep profession consider the pressing need for independent reps to develop new markets and territories.
In the opinion of Hank Bergson, former president of NEMRA, “It’s absolutely inevitable that the rep face this challenge at some point in the life of his agency.”… Read the rest
Develop an appropriate presence on the major social media sites and get the most out of your connections.
Social media is growing so fast because it addresses needs people have in real life. Businesses that meet the same requirements can also grow. By leveraging the communication and connection abilities of prospects and customers, your business can grow — but you have to do it right.
Social media has its own “Big Four.” If you have a successful presence here, you should do well. If you fail to make a connection on at least one of these sites, you will miss … Read the rest
Strategic planning is often used as a means to delay action. Change your thinking to keep your company successful into the future.
Before you invest time and money in traditional strategic planning, consider this: only 5-10% of strategic plans are ever implemented. The reason most organizations engage in strategic planning is to reduce anxiety. It’s like taking a couple of aspirin for a headache. In this case, the headache is the future. The aspirin is a couple of days locked in a room, putting checkmarks in the appropriate boxes. Mission statement (yada, yada, yada): check; SWOT analysis (Strengths, Weaknesses, Opportunities, … Read the rest
If it’s time to buy or sell a company, don’t make any moves without the strategic advice of an experienced team of financial experts.
Thinking about selling your company, buying a competitor, or maybe raising capital? You need a deal team with the right mix of talent and experience to get the best value and to assure the transaction actually happens. As economic activity starts to pick up, some small and mid-sized companies are testing the waters and seeking to launch strategic initiatives to move their businesses forward. In some cases this means raising capital, and in other cases it … Read the rest
No social media presence? No problem … for your competitors, that is. Your competitors are perfectly happy to take up your social media space. They are happy to dominate, and if you are not there, that means more for them.
There are a few rules of the road in social media. Let’s spell out what we know already about what’s working and what’s absolutely not working. First impressions can turn people off forever, so it’s essential to make a good lasting impression. And yes, in case you are wondering, you will make more sales. The path to get there will … Read the rest
Though this court case seemed like an easy win for the principal, this rep firm managed to get reimbursed for lost commission.
Consider these brutal but undisputed facts in the case of an independent rep seeking to recover, in court, a commission on the sale of a product (a cooling tower used in the beverage processing industry):
- The rep, MAK Automation, Inc., had an oral contract with its principal, GC Evans Sales and Manufacturing Co., Inc., that was non-exclusive, and did not furnish a specific geographical territory. The only undisputed contract term was that MAK had to generate or procure
… Read the rest
With the volume of information available today, your message can get lost in the shuffle. Follow these tips to grab the attention – and keep it.
Read this! Listen to this podcast! Watch this cool video! Click on this link! Tweet this. Friend this person (yes, “friend” is now a verb)! Buy this from me!
Ugh, it never seems to stop. We are inundated with messages, all trying to get our attention. All of these wonderful marketers (okay, I’m being generous) are vying to get our attention and get us involved with them, their products and services. Sometimes you just … Read the rest