The year was 1947. Harry S. Truman was president, Chuck Yeager broke the sound barrier, and on October 17, 1947, the Manufacturers’ Agents National Association joined the community of not-for-profit trade associations.

To celebrate our 70th MANAversary year, each Agency Sales magazine through October will include a “blast from the past” article from the early issues of The AGENT and Representative magazine, which eventually became Agency Sales.

These nostalgic looks back at how our counterparts from seven decades ago conducted their businesses and their lives are really eye-opening, in some cases because they conducted their business so differently from a modern manufacturers’ representative, and in some cases because it seems that nothing has changed in all that time. Enjoy!

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So You Want to Become a Manufacturers’ Agent!
By Edgar A. Wilcox, First MANA President

(Reprinted from December 1949 The AGENT and Representative magazine)

Too many manufacturers’ agents launch their businesses more or less blindly, it must be admitted.

Many start with insufficient working capital.

Some start with hastily and unwisely selected lines.

Some possess insufficient aptitude for the conduct of a business of their own.

Some ride in on the tide, with little thought to the fact that every tide that moves in must also move out again.

Just as many pitfalls plague the new manufacturers’ agent as lie in wait for the embryo manufacturer, which, as everybody knows, are legion.

However, the more common snares may be avoided by any would-be agent, if certain “rules of the game” are carefully observed.

‘“What rules?” may be asked. Well, let us see.

Where Do Agents Come From?

A question often posed is, “Where do manufacturers’ agents come from, anyway?”

Generally speaking, new manufacturers’ agents come from the salaried ranks of industry — quite often department heads, branch managers, district managers or sales managers of important concerns. Sometimes they come from the ranks of salaried or commission salesmen.

Why they break away, and put in for themselves, is anybody’s guess. Sometimes the move is long planned, which is wise. Sometimes the move is precipitate, which is usually not so good and occasionally perfect. Sometimes the move is a cooperative arrangement as a part of a manufacturer’s altering sales policy, which is often best and safest.

But in any event, in all such cases, the new agent in the beginning must expect to face some handicaps.

He has by long training been accustomed to having his work and duties at least partly planned for him, although he may be little conscious of this.

He has been accustomed to receiving regularly a check that covers at least his living and his personal expenses, in addition to reimbursement for items chargeable to his company.

To such degree he is “a dependent,” and may have been one for many years.

He seldom has had “small business” training or experience. He may not yet have learned that every private undertaking has its own problems and limitations.

Sales agency operations, at least in the beginning, must be classed as small business, beset as such by many problems and many difficulties. The risk is great; the mortality rate is high.

But the opportunity is there, for those who can qualify!

The Fate of the Incompetent

It is only fair at this point to rule out the salesman who has watched others enter the field and do quite well for themselves, has a “yen” to get out from under the boss’s thumb and “show him” by starting a business of his own, gives up his job, rents office space, buys a typewriter, designs some stationery, and starts angling for lines.

He soon discovers that it is not so easy as he had imagined to get under way as an agent. Desirable lines are not easily acquired. Even so, they seldom become immediately profitable. Meanwhile, expenses go on; income is inadequate, often negligible. Spirits drop: the old dobber is down; anything can happen; usually does. When the drain on the bank account reaches a certain point — that fledgling agent again becomes a salaried salesman.

It doesn’t always turn out that way for such a man, but it does more often than not. And it is this feature of the sales agency game that has plagued the better agents, the experienced and established agency concerns, literally “no end.”

New Agencies Needed

Yet to the ranks each year must be recruited many new sales agency concerns. The demand has been growing constantly for many years. Since the late war, the demand for good agents far exceeds the available supply.

For this reason, MANA receives regularly many requests for information as to how to become a manufacturers’ agent, and it would thus seem timely that something be said on the subject.

How, then, to proceed?

Are there actually any “rules of the game” to be followed as a sensible guide? Do schools perchance offer anything on the subject?

Schools?

Yes, believe it or not, schools are becoming very much interested in the sales agency business. As one example only, Mr. Robert C. Harter selected as his thesis in marketing, and presented to the faculty of the graduate division of the Wharton School of the University of Pennsylvania, in Philadelphia, an 80-page typewritten research and report entitled “A Study of the Manufacturers’ Agent and the Vocational Possibilities in the Field,” for which in part the degree of Master of Business Administration was conferred upon him on February 12, 1949.

It is to be hoped this thesis will be printed and made available by the University of Pennsylvania. An outline of chapter headings and subheadings was given MANA members in Bulletin VIII, in which much interest has been shown.

Guilford College, in North Carolina, assigned “Operating as a Manufacturers’ Agent” as the subject of a senior thesis. The University of Washington, in Seattle, assigned “The Development and Function of the Manufacturers’ Agent” as a requirement for a Bachelor’s Degree. Columbia University, in New York, assigned “The Manufacturers’ Agent in Industrial Marketing” as a requirement for a Master of Science degree in its Graduate School of Business.

These are just a few instances of a deep-seated interest by educational institutions in the profession of the manufacturers’ agent, among many schools all over the country which have been inquiring into the subject and have been spreading the word among thousands who have manifested an interest in its requirements and its possibilities.

Obviously there are no fixed rules on how to become a manufacturers’ agent, as individual cases differ widely. But there are some basic principles which can be followed, and some general suggestions that should be helpful.

The Matter of Capital

The first of these is the matter of capital, although in the long run capital may not prove to be the most important or the guarantor of success.

Sometimes too much capital is a fatal stumbling block. The agent plans too big, takes unjustified long-range chances, spends too much in promotion, takes too long to get his decks cleared and his forces into action.

But adequate capital is a “must,” and it usually is more than the original estimate calls for. One established agent’s advice is to make the estimate as carefully as possible, and then multiply it at least by two. Financial worries alone can lead to disaster. When accounts fail to earn as anticipated, often over longer periods than could be foreseen, discouragement kills off enthusiasm, and every man who has ever sold anything knows that confidence and enthusiasm are prime selling factors indeed.

Lines to Handle

The next most important thing is wise selection of products or lines to handle. Strange as it may seem, more failures are traceable to poor selections than to lack of working capital.

Perhaps this is explained by the fact that the job of establishing oneself as a manufacturers’ agent should be approached, and for success usually is approached, as a more or less natural conversion from one commercial status to another, within a field in which the individual is well trained, highly skilled, and preferably well known to the trade he expects to serve.

The wiser the choice, the less capital will be needed to carry along.

“What are the qualities, then, to be looked for by the agent in a prospective account?” This is a difficult question to answer. The subject is often very much involved.

For instance, some products and lines are marketed, at least in many areas, almost exclusively through manufacturers’ private sales organizations. That’s the way their sales are set up. Agents are used by them only in certain outlying territories, sparsely populated, where it is unprofitable for them to travel a private salesman selling one product or line.

For a new agent to take on a competing product of a lesser manufacturer in a territory where the big fellows make their major sales through direct selling, is to face an obvious handicap indeed.

On the other hand, if the product of the lesser manufacturer is an outstanding improvement, fully protected by patents and manufacturing ability, one easily demonstrated and with a wide potential demand, it may be exactly what the doctor ordered for any agent who knows that field.

Look for Established Markets

In general, a new agent should look for lines that are already established and with something of a market already created. It’s tough to have to start, out there, from scratch. The agent, one way or another, will have to bear most of the cost of the necessary promotional effort. And that’s expensive, and usually little appreciated by the manufacturer who expects the agent to do it.

The point has been made that the agent should select products or lines with which he is familiar. There have been exceptions, and some of them have been notable successes. But it is always best to venture with new products and lines after your agency is well established. In the beginning of any agency, it is most difficult to estimate the real potential in any field with which you have not had many years of experience. There is too much chance of too many things going wrong with the original calculations and plans.

Accounts Should Dovetail

And then it is very important that the accounts selected dovetail. By this is meant that they have corresponding fields of use. Overlook this one, and disaster will dog your every footstep. Sometimes “field of use” is not quite the right expression. Sometimes “field of buyers” should be substituted.

Obviously, an agent can save much time when he can offer all of his wares to one buyer, rather than have to present portions of them to several buyers. In any event, it is an important point to be considered.

For agents, as a general thing, coordinated lines of relatively important items catering to relatively few substantial customers are preferable to those that sell smaller items far and wide. Intimate contact can be maintained with the substantial fellows, who are much more likely to be appreciative and remember you, than with the many purchasers of small items where new competition constantly stalks the street.

This is not to say, however, that agents have not succeeded with small items sold to many people. But it requires special circumstances and special planning and consideration for any agency to start out that way.

The relative merits of “equipment” accounts and what are commonly known as “supply” accounts should be weighed carefully by the new agent. Supply accounts are fewer, usually in greater demand, frequently more remunerative, but may require or involve investment of capital in local stocks. Equipment accounts are more numerous, easier to acquire, sometimes more interesting, but take more time and effort to promote, sell and service. Sales volume of supply lines is likely to be greater during periods of depression than that of equipment. The established agent often balances one against the other, to smooth out the sales curve.

How Many Accounts?

“Should I start with several large accounts, or a larger number of small accounts?”

The answer to this question will depend upon the answer to other questions. Can the new agent get several large accounts, or must he be content with perhaps only one for a time? Perhaps he may not be able to get any. He may have to get under way with several small accounts, or not do it at all.

All that can be done here is to indicate the choice, if a choice is presented.

Investigate the large accounts very carefully as to likely continuance after promotion and establishment in the territory in question. Try to learn what that concern has done in past years in other areas by way of treatment of agents. Do they use agents to pioneer, and then take over? A few do; the better ones don’t. No agent can make any money pioneering; try to remember that. That is one of the reasons MANA developed a “Standard Form of Agreement,” which may be used, among other things, to project an agency operation beyond the unprofitable pioneering stage into the profitable future. It all comes under the heading of “What’s good for the goose is good for the gander.”

It is difficult for an agent, as a general thing, to do justice to too many small accounts, particularly the new agent.

Other Considerations

Other factors to be determined by anyone thinking of setting up a sales agency are (1) a reliable appraisal of available business in the field under consideration, (2) relative merits of product with the range of competition, and (3) an appraisal of the competitive sales possibilities for the product you are considering, under the handling you are going to be able to give it.

Do these many things frighten you? Don’t let them. Buckle right down to it.

And then, last but not least, get a credit rating on the firm you plan to represent. Find out something about its management. Does it change sales managers often? Who are now its agents and are they satisfied? How do the commissions it pays compare with those paid by its competitors? Will it enter into a fair agency contract? Can you honestly say, after looking into these things, that you can be proud to represent it?

After all this has been said, there keeps running through our memory these terse words of H. B. McCoy, director, Office of Domestic Commerce, Washington, on the subject of operating as a manufacturers’ agent:

“When he (the would-be agent) is ready to start out on his own, he should be able to take one good established line with him to form the foundation of his new agency.”

Launching the Agency

Now suppose the new agent has taken the step, and hung out his shingle.

If he has not already done so, he should establish some definite policies for his business, and lay down a definite procedure for himself.

His chief stock in trade is a fair and profitable division of his time.

Don’t allow yourself to be pushed this way and that, either by over-zealous principals or by the minor duties of your own establishment.

The big orders, the profitable business, will not come flying in the window. But trivial details will clamber from every corner for your attention.

You’re on your own now. You are a free lance. You are a professional. Your success will depend largely upon how wisely you divide your available time.

Success Factors

Until now you probably never realized how very limited were the calling hours. The peak is mid-morning, and mid-afternoon. At that time where will you be? If you’re smart, you’ll be right out there in the field, pitching. Let the office work wait until evening: use a dictating machine; arrange with an accountant to do the bookkeeping chores; train your stenographer to run the office; call in to her often on the phone.

Insofar as you can, conform from the beginning to the policies of your principals. They will be your bread and butter. Study their literature, their bulletins, their offerings. Become expert. Follow up all inquiries, one way or another, and don’t neglect a single one.

Report to principals the important details of all trade contacts. Answer principals’ letters fully and as promptly as possible. Set up a system; follow it.

Put yourself in the other fellow’s place. In the selling game, no word is NOT good word. No word is “a dead duck!” Remember that. As a fledgling agent, don’t make that mistake.

If you do — confidence is lost; support withdrawn; grounds laid for separation.

As in all other fields of human behavior, success usually comes to those who have what it takes. Luck? Yes, occasionally, but as a rule its foresight, ability and conscientious effort, that make up the winning factors.

Don’t bother looking for the short cuts — they are few and far between.