Extended lead times, increased prices, supply problems, and pushback from customers combined to provide plenty of subject matter for a three-day MANAchat earlier this year.

An interesting side effect of the aforementioned, according to the 21 reps who participated in the chat, is that some reps find themselves having to fend off requests from principals to consider accepting commission cuts since higher product pricing has resulted in increased commission payments.

Discussion on that subject emphasized that all parties (manufacturers, customers and reps) are faced with the prospect of dealing with increased pricing. While those higher prices may result in higher commission payments, at the same time reps are faced with a number of concerns including paying higher prices to run their businesses.

One rep described his position this way: “Our sales have increased exponentially. As a result, while our commission rates have remained constant, our commissions have gone up considerably since there’s so much demand for the products we sell.”

According to another rep, “That’s a bogus argument for any manufacturer that is making that request. Sure, the commission payments (not the rates) may be higher, and we’ve naturally benefited. At the same time, however, we’ve seen increases in our payrolls, gas, hotels, insurance, etc.” That same rep made the point, “If manufacturers want us to take a commission cut when prices go up, would they be willing to increase commissions when prices go down? I think not.

Dealing With Problems

“In addition, here’s something else to consider. Since we as reps are having to deal with all of these supply chain questions and problems, our workload has increased significantly. The majority of our week is spent trying to get orders here or answering questions about delays. We’re constantly fielding questions about orders, finding alternate products, and simply spending so much time going back and forth between the wholesalers and retailers we deal with. Every day we’re dealing with complaints and questions from customers and the level of communication between us and our principals has drastically increased. As a result, we’re working longer and harder at our jobs. If anything, an increase in commission payments is more than justified.”

That rep wasn’t alone with his comments. One rep headquartered in the Midwest noted, “There are still a lot of people who are working remotely — especially purchasing. That’s been challenging in itself, but it’s brought with it the need for us as reps to work harder than we ever have before. There’s been much more involvement in following up leads, reporting to manufacturers and simply spending a lot of time with email and on the phone. I think one thing that has happened is that manufacturer executives have had less to do. As a result, they’re micro managing the process more than they’ve done in the past.”

As he viewed the current state that reps find themselves in, one rep reported that “First we all got hit with Covid. Then problems with the supply chain cropped up. We’re left with having to deal with all the problems that accompany those two events.”

Commenting on what appears to be a fairly universal problem — lengthening lead times — reps across the country have no choice but to deal with it. Comments such as “While I used to be dealing with lead times of 14 days, now those are out to 60 days,” and “Things that were once 90 days have extended to 120” were common in the conversation.

Finally, one rep noted that the extended lead times he’s dealing with have only affected business when a customer is able to find a supplier who can deliver in a shorter period of time. “However, that’s rare since just about everyone — manufacturers and reps — is facing the same problem. Basically, we’re all in the same boat.”

Several reps voiced the opinion that one of the major causes for the unavailability of products and lengthened lead times is the fact that many manufacturers don’t have the personnel available to produce the products they sell. “I’ve found that there’s simply a shortage of people at the manufacturing plant — that’s a significant issue.”

Where Are New Products?

According to one rep, “I don’t know if their personnel problems are caused by manufacturers pushing out people or that their workers are looking for greener pastures and deciding, ‘I can go across the street and make more money.’ The fallout is affecting all of us. Added to that is the fact this is resulting in a decrease in the development of new products. As we all know, new products are the lifeblood of a rep’s existence. Without a constant flow of new products, we’re at a distinct disadvantage.”

Customer Pushback

When it comes to dissatisfaction or pushback from customers, reps in general were in agreement that they haven’t experienced a great deal. According to one rep, “Price isn’t the issue with my customers. My principals have raised prices three times since last summer. We’re simply passing those increases along to our customers, and they just pass it along. I’d say that, in general, all of my customers are okay when it comes to price increases. The real issue for them is that they get the products they’ve ordered — and that remains a problem.”

As to whether the challenges reps are facing have resulted in any strain on their relationships with their principals, reps seem to prefer the use of the word “stress.” According to one rep, “Sure there’s a lot of stress. That stress is lessened with manufacturers who are more communicative than others. I’ve found that the ones who are willing to deal with price increases and delivery problems are a lot easier for us to work with. They’re the ones who feel that satisfying their customers is the most important thing to do.”

Constant communication would appear to be a remedy for many concerns as one rep noted, “Everyone should be forthcoming as we deal with these problems. Don’t surprise us. Don’t tell us something is going to be here at a certain date, and it never shows up. If we can’t get accurate information from manufacturers, then that’s going to strain the relationship on both ends of the spectrum.”

MANA welcomes your comments on this article. Write to us at [email protected].

---

List of MANAchat Participants

MANA wants to thank the following members for their contributions to the “MANAchat Explores Supply Chain Concerns” Agency Sales magazine article. These online virtual meetings create a platform where members exchange information on how to successfully operate their manufacturers’ representative businesses. Jack Foster, Agency Sales magazine editor, wrote the article using the information and knowledge these members provided during the MANAchats.

Thank you! We sincerely appreciate the time you took to participate in the MANAchats and particularly the information and knowledge you shared.

Advanced Engineered Products
Eric Blythe
Titusville, FL

Allan Forrest Sales, Ltd.
Derek Letcher
Calgary, AB, Canada

Allan Forrest Sales, Ltd.
Ryan Vickers
Calgary, AB, Canada

Architectural Design Resources
Kristi Haines
Plymouth, MA

Carver & Associates, LLC
Marc Carver
Lake Oswego, OR

Custom Components, Inc.
Michael Fiegel
Loveland, OH

DLBerman & Associates, LLC
Darryl Berman
Johns Creek, GA

E P I
Richard Morse
Kansas City, KS

The Garham Group, LLC
Anthony Zasuwa
Nunica, MI

Industrial Sales Associates
Rich Deering
Indianapolis, IN

Mathews & Co.
John Walsh
Aliso Viejo, CA

Security Solutions Representatives
Cherise Gallegos
Elk Grove, CA

Southwest Architectural Products, LLC
Daniel Duffy
Frisco, TX

Viper Mechanical Marketing, Inc.
Russ Blanco
Winnipeg, MB, Canada

The Zonk Group, Inc.
John Lanzillo
Plano, TX