Exhibiting further evidence that the challenges and travails of being an independent manufacturers’ representative cross industry lines, two other reps — one from the furniture industry and the other who sells “green” products — explain some of their concerns and experiences with being a rep.
It should come as no surprise that reps working in the fabric/furniture industry — just as their peers in other industries — rely heavily on their personal relationships to serve as the foundation for their businesses.
At least that’s the view of Brian Gallagher, Homcraft, LLC. Homcraft, an agency that markets and sells fabrics to furniture manufacturers, is headquartered in High Point, North Carolina, and has reps located in the United States and Canada.
As he describes the similarities and differences between his industry and others that reps sell into, Gallagher notes that just as everyone else, those selling into the home furnishings industry were hard hit by the recession. “When times get tough, purchasing a new sofa is far down the list of what someone is going to buy. At the same time, we’ve seen quite a dip in the home building industry and that obviously has a trickle-down effect on what we do. People also have been buying a lot of gadgets in lieu of furniture over that last couple of years, and that’s taken its toll on us.”
If times have been tough, however, Gallagher is beginning to see a turnaround, and that turnaround began last year when his company had its best year ever. “We’re seeing business come back and we’re looking forward to the rest of this year. As a matter of fact, we’re looking at a 10-year window of opportunity right now that causes all of us to be very optimistic.”
Written Agreements
Gallagher, who’s been a rep since leaving college in 1984, notes that in speaking with reps serving other industries he’s aware of the similarities and differences that they face. “Just as others,” he explains, “we prefer to work with written contracts although some of our agreements are done on a handshake. In terms of negotiating agreements, the important considerations for us are quality and delivery. Keep in mind that manufacturing fabric is not an exact science. That’s why quality is so important to us. As a matter of fact, I’m right now on my way to a factory to iron out some difficulties we have with quality.”
Other important areas of concern for reps in the furniture business are lead times, customer service and post-termination agreements. “It’s fairly general practice that three- to six-month post-termination clauses are included in our agreements. Even in the absence of a written contract, most people in our industry are professional and the manufacturer will generally continue to pay for that three- to six-month period, not to mention to pay for commissions on open orders.”
But perhaps the greatest similarity that Gallagher sees in reps in his industry and in other industries is the fact the furniture business is a people business. “There aren’t all that many players and we tend to know them all. That’s why personal relationships are so important.”
Finally Gallagher makes the point that the greatest value-add that reps in his industry can provide for their manufacturers is the fact that “We continue to be a variable cost for the manufacturer. As a result, the manufacturer doesn’t have to pay us commission if we don’t sell products. That concept compares — just as it does in other industries — with the concept that the direct salesman gets paid no matter if he sells or not.” He adds that “We even have one manufacturer who actually adds our commission to the price of the product. That means we’re working virtually free for him.”
Green is Good
A history of working in the building materials industry serves as the impetus for the industry Nick Hobbs finds himself in today; and several years of studying Latin in high school pointed him in the direction of the name for his rep agency — Via Viridis Green Solutions Inc.
According to Hobbs, Kennesaw, Georgia, (near Atlanta), Via Viridis is the Latin term for “the green way,” and those words don’t just name the agency, “They define our direction. Our mission is to improve the quality of life in the Southeast by providing education and materials to support sustainable building and living. To that end, we seek out products that are proven in other markets — around the country and around the world — and bring them to the Southeast so property owners here have a local source for the world’s best environmentally-friendly products.”
Hobbs’ pursuit of that direction has resulted in a line card featuring a selection of eco-friendly wood, bamboo and composite deck, dock, pergola and railing products. Also included are a lumber coating stain resistant to fungus and mold, low-voltage LED lighting for deck stairs and outdoor railing and a line of color-matching fasteners. A bit of a strange complement to his building line of products is something called a hearing loop system. Simply described audio-frequency induction loop (hearing loop) systems have improved the hearing quality for millions of people in Europe where hearing loop systems are installed in most public places including auditoriums, churches, and transit stations. According to Hobbs, hearing loops are gaining popularity in the United States in churches, meeting facilities, and in homes. “There is some overlap for me as I encounter customers interested in this product as I sell building materials,” he explains. He adds that his longer-range plans call for this product to be trended out of his building products and he’ll sell it via a separate company.
Beginning Door-to-Door
Hobbs explains that “When I started working, it was in IT, but I always enjoyed sales work. As a matter of fact, my very first job was in door-to-door sales. That drove me to become a CPA so I wouldn’t have to do that for the rest of my life.” Since that beginning, he’s been in the building materials business for more than two decades — half of that time spent with Home Depot and the last half as a manufacturer/wholesaling entrepreneur. “I have spent a great deal of time working with building materials and have been a member of the Greater Atlanta Homebuilder’s Association which has a ‘green council.’ I’ve learned that there’s an interest and growing demand for green or eco-friendly products and thought this might provide a great opportunity.”
While new to being a rep, Hobbs got a jumpstart on his new career by first joining MANA and then participating in the second wave of the association’s mentoring program directed by Joe Miller, MANA’s former President and CEO. Based on his few months in the business and his networking with reps from other industries in the mentoring program, Hobbs notes that “While I’m probably a little too new to the profession to speak that much about differences, I’ve certainly been able to spot similarities in being a rep in my industry compared to others. Perhaps the biggest similarity is in personal relationships. I find that the relationships I established earlier in my career are among my longest lasting, and I think that’s going to be the case with being a rep. The richness of your relationships is what can determine the success or failure of your business. Remember that it’s much easier to sell products to existing customers, and that’s what we’re going to do.”
Even at the relative beginning of his rep career, Hobbs notes that he’s aware of a couple of challenges that he’s going to have to meet — finding new lines and sustaining the business in the face of 5–10 percent commission rates. Considering the former he explains, “Our plan to fill out our line card is to use MANA as a resource, research trade publications that focus on sustainable building products, attend trade shows and network with principals and architects involved with green products.”
On the latter subject of commissions — certainly something that all reps can relate to — Hobbs says, “Business remains exciting but it’s certainly going to be a long road in the face of those commission rates. With my background as a manufacturer, I know we had better margins. It will take a long time to achieve what we’re aiming at, but business is picking up and I’m confident we’ll get the job done.”
