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Claims of “Big Brother” surfaced when a manufacturer made the request that his reps use e-mail addresses with the principals’ domain name. Their rationale was “Adding their logo to the end of your e-mails is the best way to provide a manufacturer with more exposure.”

Not all reps agreed with that thinking, however, as detailed in the MANA discussion group on LinkedIn. Two reps immediately noted that this “smacks of Big Brother” and is likely a first small step toward replacing the reps with “factory” reps.

Another rep offered that “I have flatly refused anything like this. I have principals that wanted me to use their business card also. I think this diminishes the rep in the eyes of the customer. I’m not just selling for that one principal, but for my entire line card. Also, it might violate the 21 safety harbor IRS rules for determining independent contractor status. Tell your principal that you will use his e-mail address if he will pay your SSI taxes. My guess is he will drop the issue.”

He continued, “It has been my experience that when a manufacturer feels his rep is an employee it can only lead to trouble. After all, you can fire an employee with no notice but a rep has a contract. We need to constantly stress that we are independent businessmen (and women) providing a service that is more than just selling. If they want an employee, they can hire one, but if they want a business partner that will help them market their products efficiently and provide other services at a fixed cost of sales, then hiring a professional rep is the smart choice.”

Still another maintained that “The big negative in my view is that the rep loses his identity, and potentially, ultimately, his business. When the rep has been terminated, the principal continues to get the rep’s e-mail, but the rep doesn’t. There is also a confusion factor in that if the rep is using multiple e-mail addresses, i.e., his own address and potentially one for each of his principals, which one should the customer use? Third, what if the customer wants to address multiple principals’ products in a single e-mail — happens all the time — or something private the rep may not want to share with the principal? The whole idea is bad.”

The discussion didn’t end there. “As an independent manufacturers’ rep, your most valuable asset is your contact base and the relationship you share with them. Using an e-mail address which can be monitored or compromised by one of your manufacturers is really no different than opening your books to them to see how much money you make. I have always been very clear to my manufacturers that until a distributor sends over a credit application or purchase order, they are ‘My’ customer. Once they set up the account they are ‘Our’ customer. You must be somewhat protective of your prospects and contact list and I feel using their e-mail opens this database up to someone who holds you to a 30-day contract. Adding logos for the manufacturers you represent to your e-mail would be a good idea as it can also keep the other manufacturers’ names in front of your customers.”

The Other Side of the Discussion

Not all participants in the discussion were against the suggestion, however. A manufacturer weighed in with the view that “It’s been my previous experience that reps don’t pass on enough detail about their contacts with customers, prospects and reps. There’s a larger, more difficult issue to bridge — how to pass on data details to manufacturers without burdening reps with paperwork or invasiveness?

“In a previous life, we had a very successful rep who was always placing incomplete orders, i.e., they’d just order a bronze or stainless widget. They never provided the additional details about the options such as gear ratio, gearbox type, etc. Nor did they ever provide any information regarding the nature of the application. It always forced us to go back to the rep to inquire about these details. Experience showed we would have gotten better information had we gone straight to the appropriate person at the rep’s customer. But how do we do that and still retain the rep’s trust and confidence?”

Another case for the rep adding the e-mail address was cited by a rep: “There is at least one case where it is an advantage for me. We had a principal ask us to help at an industry-specific trade show he wanted to exhibit in. That industry apparently does not like reps. We had a great show with a lot of leads that I followed up on using a principal e-mail address, with potential customers thinking I was a factory employee. After several relationship-building contacts, being an independent rep was not an issue. But, looking back, being able to use the principal’s e-mail address was a help.”

Another rep was proactive when he asked his principals for e-mail accounts within their domain. “I don’t have them routed to my company’s e-mail though. I am monitoring them within their own systems. I don’t mind being considered as an ‘employee’ in this regard because I believe that just like with clients, the further you can infiltrate your principal’s world, the more value you can bring, and the more they see you as a team member. Plus, it does lend credibility, especially in the early stages of developing relationships with target accounts.”

He continues, “I still use my company e-mail as well. It just depends on the level of involvement with a given customer. If I sell multiple principals’ products to a single account, I switch that account to contacting me with my company e-mail. It works very well for me.”

Staying with the point that “reps don’t pass on enough detail about their contacts with customers, prospects and reps,” a rep asked, “Shouldn’t the rep and his principal have come to an agreement as to what information was needed or required before taking on the line? But then again, how do you pass on data details to manufacturers without burdening reps with paperwork or invasiveness? That’s a question that solicits its own discussions!”

And finally, another discussion participant offered, “I think the ‘Big Brother’ concept (as it relates to e-mail) is going away. The data in e-mail is too valuable to keep trapped in inboxes. It’s corporate communication and should be available to the organization. Solutions (not Outlook/Google) are now available where incoming e-mail (into the entire organization) can be coded to a specific transaction, available for review by the entire team (still with the ability to mark any message as private — so it can’t be seen). I’d suggest that kind of solution. Manufacturers should be given access to see ‘their’ transactions, which gives them the history they want, for helpful review, with no extra burden on rep.”

The Need For Exclusivity

A second subject — of interest to both reps and their principals — cropped up when a MANA member described an issue they encountered when negotiating an agreement with a prospective principal.

According to the rep, “The principal does not want to define a territory and wants to work on an ‘account-by-account’ basis. They are not offering any exclusivity, yet demand the agency be exclusive to them. They have yet to offer a defined reason other than it ‘is not in their culture to offer exclusivity.’ They have even hinted that it is illegal for an agency to rep other competitors. They are not offering any pioneering contribution.” The rep concludes by asking: “How have others handled this type of negotiation?”

It should come as no surprise to manufacturers that reps’ responses, in general, were in the negative. The first bit of advice from another rep was to “Walk away. The manufacturer can continue to hire as many reps as they can find in your backyard who are willing to sell the line. Many of those reps can take market share from you. Essentially this same manufacturer becomes your competitor and if they give an account in your region at a competitive advantage over your customers, your commissions all go away. We will not sign any new lines that do not give us an exclusive contract for the entire channel of customers we specialize in nationally.”

Another rep advised, “Don’t walk, run away! You can bet this principal will be a problem once you do all the hard work and get them some business. I see commission, house account, split commission, and commission reduction problems down the road. Look for a principal that understands that you are running a business and not a charitable organization for principals.”

A consultant maintained, “It is a fundamental flaw in management thinking that a salesperson only does their job when they get an order — this is true for a rep or a direct sales force. There were many, many deals my manufacturers screwed up (design, QC issues) when I was a rep and the other deals that fell apart because the customer dropped the project altogether or moved it elsewhere — all deals which took my professional selling time to develop and nurture (which is really doing my job), but for whatever reason didn’t bear fruit as the result of uncontrollable, non-sales related circumstances. Exclusivity is merely a means to even that score — and if we play the game long enough, the score always evens out.”

And, another rep summed up the discussion when he offered: “A job-to-job basis rep contract with no exclusive territory is worthless. Actually, closing the order is only 10 percent to 15 percent of the required effort that a sales rep puts into a project. Manufacturers that do not understand that basic principle are doomed to failure. The competitors of that manufacturer that do understand will eat them up and bury them very quickly.”