The New Year provides an opportunity for a fresh start — a chance to plan ahead, redouble efforts and strategize to improve over past performance. That’s exactly what independent manufacturers’ representatives do, just like everyone else. As the 12 months of 2015 loom in front of agents, several volunteered how they were viewing the upcoming months and described what they see as opportunities to take advantage of, challenges that must be met, problems to be solved and obstacles that must be overcome.

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•   Firmly embracing a philosophy that there’s no sense in peering into the future before taking stock of the recent past, Greg Pellot, vice president, Hile Associates, Inc., headquartered in Greensboro, North Carolina, noted that at the time he was contacted by Agency Sales, “We had begun the final working phase of 2014, the three-month push until the New Year. We forecasted early in the year that we would see greater activity in the second and third quarters of 2014 vs. the first two quarters. It appears this prediction will pan out as planned.

“Quoting activity was not as strong this summer as we thought it would be due to personnel being on vacation, which had more of an impact this year, and due to budget constraints by both governmental entities and commercial accounts on new-product development. We will see if any of this turns around especially during the next 90-day period prior to the lead-up to the Christmas Holidays.

“During the summer, we saw and learned some interesting developments with several of our OEM markets. Demand is down for power distribution systems for dock-side power for marinas. Since boating is more of a luxury activity, demand for their products has been limited. Another area that was expected to boom this year was the expansion of cloud-based data storage for all types and sizes of businesses. This has not happened to the levels expected primarily as the result of data security worries that many customers have at this time. There simply have been too many reported instances of systems being hacked and data compromised at many banks and other high visibility companies which have left companies and individuals feeling uneasy about this new service and the accompanying security risk. Briggs & Stratton has announced that they will be closing the plant in Georgia and moving the operation back to Wisconsin. This is one of the first such reversals we have seen of a southern plant being closed and moving back north.

“We have seen other examples of companies moving operations to Mexico from the United States. A company specializing in rubber and plastics technology has moved purchasing to Mexico. A metal fabricator reports that their biggest customer has relocated to Mexico and is having their metal components supplied now by a Mexican supplier as well. They are now trying to develop new customers to offset this loss. Last, a manufacturer of various products for the medical and liquefied gas industries, to name two, reports that their business is up in 2014 and they expect strong growth for the foreseeable future.”

As he continues to look to the future, Pellot says, “We cannot stress enough the importance of our principals quoting and responding back to customer requests in a timely manner. We had an instance this summer where a principal’s engineering department ‘fumbled’ and delayed their response back to a major new customer, which has now put future business from this customer in jeopardy due to the delays in shipment by the principal. In most cases it takes us a great deal of time to develop a new customer for any principal. To have something like this happen negates the months or years of efforts to get that first opportunity.

•   Our forecasts for 2015 are in the very early stages of development at this point and we are anxiously awaiting the outcomes of the midterm elections before we finalize them. Many of our principals and customers are holding off on hiring and capital investments until after the elections.

“Turmoil overseas and the uncertain impacts to the global economy are concerns as well. Our agency focuses on the things in our control in order to maximize our continued growth. We are always looking for the right new principal to complement our existing line card, but we are very careful to be sure there is a great fit before we commit. We will continue to learn from and train with our principals to increase our ability to provide enhanced technical expertise to our customers. Expense control and careful call planning are essential to maintain our profitability. We also continue to stress ‘Value Added Representation’ with our principals by providing market, technical and competitive information in addition to profitable sales.”

•   According to Marve Breeding, EER Systems, LLC, Birmingham, Alabama, among the major concerns he sees in the industry he serves is his customers’ ability to budget and free up funds for projects they’ve planned. EER provides engineered equipment and field services for pulp/paper, aluminum, chemical, cement, lime, iron/steel, manufacturing, utility and waste-to-energy plants operating boilers, kilns, furnaces, incinerators and manufacturing process auxiliary equipment.

“Whether it’s a project planned to enhance customer operations or something initiated for ‘green’ reasons, the challenge remains to allocate the funds to get the job done,” he says.

If that’s a concern of his customers, internal to the operation of his agency is the challenge EER Systems faces to “sign product lines that will complement those we already represent. That’s something that takes a good deal of our time — and will continue to do so during the coming year.”

•   Achieving face-to-face access to customer decision makers is a task that has become increasingly difficult over the years — and it’s a task Peter Fantasia realizes he and his fellow independent representatives wrestle with on a daily basis.

According to Fantasia, Fantasia Industrial Sales, Co., East Greenwich, Rhode Island, “During the more than 30 years that I’ve been a rep, it’s more difficult today to get to the customer than it’s ever been before — and it’s a situation that I don’t see improving.

“It’s even becoming a challenge to locate the right person to speak with,” he says. “I’ve had experiences at trade shows, for instance, where contacts have told me that either the phone number or e-mail address they’ve included on their registrations for the trade show are incorrect. They do that because they don’t want to be overwhelmed with contacts they make at the show. My experience has been that if someone at a trade show truly wants to speak with me, they’ll pull me aside and provide me with their correct contact points.”

Fantasia cites the typical gatekeepers that agents face ranging from voice mail to e-mail. “It’s not unusual for customers to remain behind their voice mail and e-mail and fail to respond to efforts to contact them. It’s reached the point where I have some large customers who have let me know they don’t want to speak with me unless they have a question or a problem.” He adds that on a number of customer websites, very little personnel information is included that will lead you to the right person. “If you find a name and title on a website, it’s a little bit like finding gold.”

In addition, he notes the disappearance of one of the most useful amenities that used to be found in customer lobbies that made his job a bit easier. “In the past there was a desk, chair and a telephone that I always made use of. If I arrived at a company without an appointment, there were up to 10-12 contacts in purchasing or engineering that I could touch base with. If they had a question or problem, they’d come right down to see me. That’s not the case anymore.”

•   One thing that Judy Gripp promises to keep an eye on during the coming year is the weather. According to Gripp, Gripp Inc., Westfield, Indiana, “Last winter’s weather was just terrible. When we were forced to shut down operations for an entire month it not only hurt our numbers, but also our morale. As a result, for 2015, we’re going to be prepared with plenty of things to keep all of us busy whether it’s product training or other courses.”

She adds that during the course of the New Year, her agency will be looking to grow in terms of personnel and adding lines. “Our greatest challenge, however, remains to do all of that without losing focus on our customer base or causing any disruptions in our business.”

•   If there’s any challenge that remains a constant for independent manufacturers’ representatives it’s that of finding and signing new lines. According to Tom Mayberry, QES Solutions, Inc., Rochester, New York, “I’m remaining positive about the coming year since I see the automotive aftermarket making a comeback. At the same time, however, is the concern with signing lines. We’ve had some luck through our attendance at the annual SEMA conference, but we’re not the only ones there. It seems everyone else is trying the same approach.”

•   Merger activity among principals and customers has got Eric DiSalle’s attention. DiSalle, Elus Co., Cincinnati, Ohio, explains that his agency deals in the electrical utility industry and he says there’s a great deal of merger activity.

“You’ll have one principal buying another. When that happens, it’s natural that we want to continue to conduct business with both entities, but you know that’s not going to happen because we can’t be representing competing lines. At the same time, we’re finding that margins are tighter than they’ve ever been in the past. What results from that is that some manufacturers start complaining because they feel that they’re paying too much to their reps. That’s not something that makes an awful lot of sense to me. The cost of selling through reps is predictable. As a result, since I’d like to believe they realize the more their reps make, the more they’re making, reps are the most cost-efficient means of going to market. But that’s simply not always the case.”

He explains that to meet these and other challenges in the coming months, “I’d like to believe that we’re among the rep firms who are very proactive when it comes to marketing their agencies. For instance, while we have some manufacturers that would like us to provide them with call reports, for the others who do not, we regularly let them know what’s going on with customers. We proactively report to them and have a quarterly newsletter that we send out.

“We also regularly visit our top principals and actually ask them to grade us on our performance.”

•   Finally, the subject of re-shoring was introduced to the conversation by John Harrington, Evergreene, Bowling Green, Ohio. According to Harrington, he sees a movement among manufacturers that were previously manufacturing their products overseas coming back to the United States. “On the face of it, this is good, but what has happened is that so much of the tooling business has become centralized that it’s very difficult for a rep on the outside of this centralization. My challenge, obviously, is to settle on an approach to this market that will allow me entrée.”

He adds that even in the face of this challenge, “I remain positive for 2015. What I’ve got to do is to be willing to change myself, change the way I approach the market and be willing to look in new directions for business.”

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