When the author of this article was asked to recall some of his experiences with manufacturers and customers, he was quick to cite a couple of instances that bore out the axiom, “No good deed remains unpunished.” At the same time, with more than 50 years under his belt as an independent manufacturers’ representative, he offers some valuable advice for his fellow reps. Read on to learn if any of his experiences sound familiar.

Here’s what happened to me. It was a number of years ago when I was calling on a major industrial manufacturer who consumed large volumes of brass rod. It was late fall, around mid-October and for the very first time the company I represented was getting ready to have a major layoff.

In the course of making a routine sales call at a major industrial manufacturer, I was told by the receptionist that the company president/CEO wanted to see me. I was immediately told they were changing over their accounting system and making a switch between First-In-First-Out and First-In-Last-Out and they needed a high volume of inventory.

I asked how much, and they answered 500,000 pounds. However, the challenge was that the entire amount had to be delivered to stock in their plant before December 31. Of course price mattered. Were we interested? I answered for the mill we represented and said we can do it! I was told to get a current price schedule, submit it and get an assurance of delivery on time. I did what was required and received the order.

Ultimately, the mill did not have to furlough any employees. They began shipping full truckloads to the customer. Finally, they completed the order well within the “Drop-Dead Date.” The CEO of the industrial company thanked me and thanked the mill at the same time.

About March, I received a call from the mill’s sales manager who was in town and wanted to see me. He came to my office and, with a very sad face, handed me a large commission check and told me I was “Fired!” I was fired because I had made more money in March than the GM of the mill.

The GM informed the sales manager that no single salesperson has the right to make more money than he makes. The sales manager was shaken and did not like being placed in the position of having to bring such a negative message to me. Eventually, the GM of the mill was discharged — after getting the mill into a first-ever strike. Ironically, he became GM of another mill and they discharged him after a year.

The president of the industrial company allowed his buyer to gradually change volume to another mill or two. At a later time, I was able to help the manufacturer customer.

Solving a Long-Standing Problem

It was later that the president of the industrial company asked me to come into his office. He closed the door and told me that they had a problem with a long history. It seems that they had a chronic shortage of brass scrap from the machining operations they performed. (The scrap volume was a significant percentage and the dollar value was high.) The company could not figure out how the shortage was occurring on such a constant basis. I was asked to come up with possible solutions.

I reviewed the steps that were consumed in the entire process and who handled “what” I was informed that a large “friendly” scrap dealer handled their scrap because he paid immediately after each scrap pick-up. I learned that two of the industrial plant’s employees represented the company to the scrap dealer. I conducted a few interviews and found out that the scrap dealer had a large tractor trailer come into a separate weighing service and would have the vehicle weighed and a receipt made. The truck driver would present the receipt to the industrial company’s employee. The truck would be filled with scrap and the driver would be weighed once again by the service source for weighing and then would leave.

One day I was at the service company that performed the weighing when I noticed large attachments on the bottom of the trailer. I figured they were water containers.

I scheduled a meeting with the CEO of the company and explained that I believed his employees and the scrap dealer were involved in a cheating scheme. The truck would arrive at the weigh scale device with special tanks holding water attached underneath the trailer. They probably held 1,000+ pounds of water based on what I saw. I figured the truck/trailer would make two daily pickups.

After being weighed with water on board, the truck would be taken someplace where the water was drained from the tanks. Then the truck was filled with scrap and would return to be weighed once again. Thus, the scrap dealer would steal approximately 1,000++ pounds per load. This had gone on for some years. As a result of what I learned and reported, one of the employees was allowed to retire and one was fired.

When I came back to make a call, the company president asked to meet with me. He told me that they had reports that the ex-scrap dealer was going to get revenge on whomever had disclosed what was happening. To prevent them from pointing at me, would I please use the workers’ parking lot and not the suppliers’ parking lot? I complied with his request.

Going the Extra Mile

Shortly after all of this occurred, I was contacted by a large conglomerate manufacturer that was a significant supplier to the automobile industry. They had a problem in that they were doing a significant amount of automobile plating on a new plating system but had no diversity in markets and were at the mercy of the automobile industry. They wanted a sales rep to find them high-volume quality plating, die-casting business in other markets. After a thorough audit of their capabilities, I decided to represent them.

I zeroed in on another industry but found resistance as a result of a number of factors. One day, when I was visiting the target where I knew the president, he called me in and asked me to work closely with the chief engineer on a new thin-wall die-zinc casting. I learned they had the design but did not have the capability to make the part and they expected the volume to soar but there was no guarantee. I worked with the chief engineer, his associates and the new purchasing agent. Ultimately, I presented all of the inquiries to the plater and asked for a quotation.

They quoted, then nothing. One morning I was in the lobby awaiting my call to go in to see the purchasing agent and was told to see the president right away. I did, and his question to me was, “How long will it take for us to reach the plater and to audit their factory?” I asked him, since the plant was in the next state, when did he want to visit? He replied, “Today!” I told him to give me about 20-30 minutes and I would get back to him. I called the plate’s plant manager and told him a group from the target company wanted to visit that day. He said to bring them on.

I hung up phone and then made another call to local county airport. Yes, they had a large twin-engine plane, complete with pilots who were available to fly today. I drove to the airport, made all the arrangements, including paying for the plane trip. I then called the president of the target company and told him to come out to the airport and bring his team. In the meantime, I called the plater and told them the approximate time of our arrival.

We had a late lunch, toured the plant and completed a business meeting during which current prices were quoted and accepted and a favorable decision was made. Volume started up and increased. Shipments were made.

Then, without my being involved, the supplier cut the price per unit at the urging of the customer. My commission was cut in half without any discussion.

Finally, the customer set up to make the very high volume in his own plant and the plater was eliminated. I stopped doing any other new market sales search for the plater. Eventually, they closed their business.

Learning form Experience

What have I learned as a result of experiences such as these? Plenty!

After more than half a century as an independent manufacturers’ representative, I’ve learned a lot. After having said that, I still look for major ways to help a customer! And, perhaps most important, I enjoy what I do.

Among the things I’ve learned:

• I don’t believe you have the choice of how much you want to protect yourself before you help others (i.e., customers). Yes, you can/should have a lawyer help you with a contract prior to signing. However, when you are in the field and a customer or prospect asks for help, I still try to provide 100 percent.
• Always have your attorney enforce your contract — especially as it involves commissions. If necessary, always be ready to resign a line. This means knowing your accounts very well and developing a following that will continue with you to supply their needs — if you move to another source.
• Know the competition, because a competitor may become your next principal.
• As with anything in life, no doubt occasionally you will encounter unethical people in business. Move on and mark the experience in your book. Do not pay part of your commission to any person that is associated with your customer. Keep all evidence of corruption in a personal file and show it to your attorney.
• If you have a challenge that requires unusual costs, discuss it with the executives of the company you represent. If the executives of the company you represent are not “above board” do not — in any way — harm your prospect or customer. Resign first!
• Even with a contract, there can be situations where your principal can decide on a solution to a problem that is entirely unfair to you. Turn the decision over to your legal adviser and have him develop a strategy of action.
• There are many companies that have management that want their reps to make a lot of commission money because it means great success for the company! On the other hand, however, there are small people, who somehow become GM of a company and who squeeze not only the reps but the employees. Check them out carefully before you sign up. If possible, talk to the previous sales rep. Ask the factory people of the company you represent their opinion of management individuals.
• Always remember to have an attorney that handles business companies as your attorney. Always keep him in your “loop.” Feed him information and keep him posted on your business. That way when you call with a problem, he will have an understanding of what you need.
• From the start, your agency will need to budget money to pay promptly a business attorney, a certified public accountant, and have funds for visiting a prospective principal. Be alert on your visits and look for both progress, and existing or potential disasters.

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