Response to the “Post Covid: The Future for Reps” panel discussion

I wanted to start off by thanking MANA for putting together the panel discussion. I had a few critiques about the call that I wanted to share with you in the hopes that we might revisit this very important topic about the “future of the manufacturers’ representative profession.”

My takeaway from the panel/call was that it focused more on the effects of COVID-19 on our ability to conduct business, some of the changes that were made, and ways they succeeded in the new environment, but seemed to lack any meaningful discussion about the many challenges our profession is facing today and beyond.

I’d like to share a few things about myself. I’ve been with O’Connor Sales, Inc., based in Cerritos, California, since 1995, after graduating high school. I started as a warehouseman, moved to inside sales and after graduating college, after a short stint as a financial advisor, moved on to an outside role in 2003 and VP/partner in 2018. Although I haven’t been in the business as long as many of your other members/panelists, I’ve seen our profession and the industries we serve change dramatically over the past 20+ years.

Our profession is at risk like never before. We face threats from consolidation (manufacturers and distributors), online retail, territory pricing/MAP, representation opportunities, succession planning, labor constraints, a move away from independent reps, and regulation.

I want to explore what we view is our most significant threat, consolidation. As manufacturers and distributors grow through acquisition, it provides fewer opportunities for representation and can diminish our perceived value in the territory. Our value has always been our relationships, our ability to sell products, and synergy created with the other lines we represent. So, what has changed?

Today, there are far fewer small/mid-sized corporations than there were just a decade ago. MNA activity over the past 30 years has changed the landscape and the players in the markets we serve. I’m sure we all have a story or two about how easily you can find yourself on the wrong side of a recent acquisition. Manufacturers and distributors alike are being squeezed out or gobbled up by mega corporations. So, how do we, as reps, adapt and stay relevant? I believe it is more important than ever to “control the sale.” I’ve tasked our salespeople to spend a majority of their time with the decision maker, who oftentimes is the contractor or specifier, rather than at distribution.

As manufacturers grow/merge, so do their demands. They want to know that you are spending time on their line, every call, every day. Providing value to the manufacturer, and almost more important, being able to articulate rep value consistently is paramount. CRM seems to be the tool (and crutch) that most agencies and manufacturers are using to benchmark and determine our value. Metrics, metrics, metrics — how many calls do you make a day/week? Can we quantify what we do? Can we replicate it in other markets? However, with all of these metrics, the manufacturer rarely acknowledges or accounts for the value of the trust/reputation that the rep firm has built over decades of service.

The overreliance on these types of metrics has led many manufacturers to believe that everything we do is quantifiable. If you make X calls on Y customers, that will equal Z sales. What we do isn’t that easily simplified, right?

We are seeing a number of larger manufacturers move to factory salespeople rather than using independent rep agencies. They take the activities of their top reps, replace them with green salespeople and expect similar results. Often, these are companies that are in the mature stage of the business cycle. Those days of “remember what we did to help your company get to where it is today” are sadly gone. Consolidation at distribution has given many of these companies enough “reason” to make this move to factory salespeople. Often buying decisions are outside of the geographic territory of the rep, “So, why are we paying a full commission (or one at all) to the rep, when he’s not the key influencer at the home office?” Other reasons may include, control (time/activities) and perceived payroll/commission reduction (although often it ends up costing them more).

Agencies can no longer bank on their long-standing manufacturer or distributor relationships to be a guaranteed income stream. Like sharks, we keep moving forward, looking for the next opportunity and line.

Joshua TenBroek
O’Connor Sales, Inc.
Cerritos, CA