Hmmmmm… it’s an age-old question and a continuing debate. As the largest association of manufacturers’ reps in North America, I’m guessing you might already know MANA’s position on this issue. I think there are situations when a direct sales force makes more sense, so I would like to point out some benefits of using manufacturers’ reps, and also correct some of the misconceptions people have about reps.

Why reps? Why would a manufacturer choose to outsource the field sales function? Two major reasons:

• Cost is the obvious and first thought: entry into a market, no direct fixed costs, easy.
• Reps’ IP is less obvious: the Intellectual Property of a manufacturer’s rep is the knowledge of, and the relationship withthe customer. This is why reps create great success.

Why not Reps? Without a more complete understanding of reps, many manufacturers fall prey to a few myths. The following three myths are borrowed from my good friend Bob Trinkle, former rep, consultant, speaker and author of Outsourcing the Sales Function: the Real Costs of Field Sales:

• Myth #1: “Reps are a channel.” Wrong! Reps are neither an additional nor an intermediary part of the channel. They are an alternative to or a substitute for direct sales. You must have salespeople.
• Myth #2:“There is a break-even point of commissions to go direct.” Manufacturers sometimes think when commission levels reach a certain point, it makes sense to go direct. My first question is, “who developed the business and grew it to these new high levels?” There are so many costs that are not considered when these conversations start brewing between the CFO and the CEO (and in some cases, the CEO of today was the CFO yesterday).
• Myth #3: “Getting increased mind share from the rep results in sales growth.” I think some manufacturers view the other product lines that reps carry as their competitors for the rep’s time. Manufacturers should recognize that they actually get more leverage from the other synergistic and complementary lines that reps have. And, it’s not about how much time a rep spends selling a line. All reps are measured by one thing — how much they sell. Activity does not always equal productivity and we don’t measure efforts, we measure results.

So, are all reps great? No, and it’s about alignment and communication. The manufacturer-representative “marriage” needs to have lots of time in the pre-selection, interview and hiring phases, much like hiring a very high-level key employee. Elements include an evaluation of complementary lines, an accurate matching of customer base and targets, a matching of company philosophies, and that overall “feel good” chemistry.

Strive for great communication and for the reps and manufacturers’ sales departments working together to knock down obstacles and barriers to maximize potential success at new business opportunities. Everyone should focus on the opportunities with the highest dollar potential and highest confidence that they will close in the next 30-60-90 days. Clear the way to make it happen. Manufacturers can become the emotional favorite of their reps by being very responsive and saying “yes, we can.”

The best reps are communication experts and ultra-multitaskers. Reps are the most performance-driven animal in the business jungle of today — they only get paid for success. Good reps know the market, the industry trends and their competition.

Growing with reps has resulted in many outstanding track records, and success with reps can be fun!