Business concerns specific to reps that work in an international arena and problems encountered by single-person rep firms were the subjects of two MANAchats conducted earlier this year.

“Look for the low-hanging fruit and be quick to build relationships.” That was just some of the advice that developed in a MANAchat devoted to the subject of reps — the majority of whom represented U.S. manufacturers internationally — working in an international arena.

Addressing the subject of low-hanging fruit, one rep explained, “For me, the Middle East represents the best low-hanging fruit. They have the most money and have an even greater potential for growth than Central Africa. When I speak about potential, that’s something that’s certainly represented in health care products, but more than that they represent the greatest potential in all product categories.”

One rep offered another encouraging view when he explained, “I’m active in home and houseware products and we analyze data in all categories from all over the world. Our view is that China naturally is huge. But keep in mind that everything is manufactured in China, so if you want to be successful there, you have to have something coming from the United States that is truly special.”

This same rep continued, “It can prove to be quite expensive, but it’s important to follow the data. What we’ve done is to take a look at a world map and in terms of potential, there’s a huge circle that you can draw around India, China and Indochina. More than half of the world’s population lives in that circle. The volume and number of people are certainly there, if not the current buying power.

“Then there’s Japan. Our business is in medical products, and it’s led by two markets — Japan and Canada. And our biggest success is Japan. While there are some major differences in how business is conducted here in the United States and in Japan, we’ve been working with a manufacturer that knows how to get their products into Japan. It’s an ideal fit for us in that the people we deal with have superb intellectual property protection and a very high level of integrity — unlike some other countries in the world. We’ve found that the Japanese people are very honorable and pay their bills on time. We do very well there.”

Echoing that view was another rep who added Germany to the list of ideal countries with whom to conduct business. “We’ve lived overseas in Germany and Japan and developed a great number of contacts in both countries. Their fairness and respect for intellectual property are very high.”

Subjects of Concern

A couple of areas that the participants in the chat focused on in their discussion were those of language, standards and cultures.

Language — When you are working internationally, English is naturally the language of business; however, it doesn’t do you any harm to have a couple of other languages available to you. According to one rep, “It’s hardly uncommon to see a German and a Dutch businessman speaking at a trade show in Germany and they’re conversing in English. The same applies to Japanese and Chinese businesspeople speaking in a hotel in China. That’s just the way it is.”

Standards — The United States probably works under more standards than any other country in the world. But no matter what company you’re dealing with, it’s imperative that you know the business standards that are required and tailor your business to meet those standards.

Culture — There are certain things you can and cannot do in various countries of the world. “The importance of knowing what you can and cannot do in a given country is no small thing. If you’re conducting business in Dubai, for instance, you have to be careful not to look directly into the eyes of a female. It’s always advisable to review what is socially acceptable prior to going to a country other than the United States. You certainly don’t want to be placed at a disadvantage businesswise or even be detained or arrested for something you’ve done.”

Building Relationships

Then there’s the constant of any successful rep relationship — that of building and sustaining solid relationships. According to the reps on the chat, once you’ve been able to establish a relationship, whether it’s with manufacturers, distributors or customers, then everything is going to run that much more smoothly. Stressing why relations are so important, one rep explained, “I’ve had the experience where a company will have a new sales manager who feels he can just write off the work the rep does for his company and then think he can save the company money by getting rid of the rep. Once a relationship is established, however, and they begin to understand exactly what it is we do for them, they acknowledge our importance to their company.”

The importance of relationships goes beyond just relations with principals and customers. According to reps participating in the chat, “Be careful about choosing the outside resources you’ll need to conduct business. Consider what banks you’re going to deal with, for instance. Make sure you work with a bank that knows how to handle resources properly. Only deal with one of the major banks — that’s one of the first steps you should take.”

Mandatory Commitment

In conclusion, one rep offered the view that when it comes to entering the international marketplace “If you have the desire to operate in an international marketplace, you’ve got to be totally committed to the effort. And, when you view international business, you really have two groups of reps — the haves and the have-nots. The latter group is one that just never took the step. I was lucky that I started looking into international business and I found that after a relatively short period of time, you just can’t help but build relationships with distributors and customers. By building those important relationships you’ll find that they’ll show you how to grow your business and be successful. International partners have been about the most honest and loyal we’ve ever dealt with. They stay with you forever.”

MANA’s Single-Person Special Interest Group Chat

The subject of shared territorial development fees never seems to go away and even grows in importance, especially in the minds of MANA members who participated in a chat specifically designed for single-person agencies.

One rep participant began the chat conversation by explaining that “I’m just at the beginning when it comes to asking for market development fees and I’m still getting used to the process. For the longest time, my value proposition to principals has been, ‘You don’t have to pay me a penny until you get paid by the customer.’ I’ve done that with the full knowledge that the principal may not be going to get paid until the customer gets the product in his hands — and that may take four or five years. I’ve been comfortable with that and, quite honestly, I’m even used to it. Then, however, I hear from other reps and read about these shared market development fees in Agency Sales and I’ve been persuaded to ask for them.

“In speaking with one of my principals I at first proposed something like $30,000 a year for the first year. And to my surprise, they said ‘Okay.’ I’ve got to admit that while I’m happy I got it, I’m still not completely comfortable. The level of discomfort comes from the fact that I’m being paid a monthly fee and now I have to be sure that I’m putting the proper amount of time into the effort — when and where it’s needed.”

Bringing More to the Table

Hearing that reaction to successfully receiving such a fee from a principal, another rep offered that he shouldn’t feel uncomfortable in that “It’s not just your time that you’re putting in; it’s your knowledge and your relationships. It’s really everything that you bring to the table. Remember, you’re still the most economical means of bringing the product to market. And, by asking and then receiving a market development fee, you’re going to find out in a real hurry who is and who is not serious about working with you.”

When asked what reporting requirements accompany the fee he’s receiving, the rep noted, “I do have to submit monthly reports on my activities but aside from that I’m in communication with the head of sales on a more than weekly schedule.”

Another rep offered that the first rep should hardly feel uncomfortable. “My habit has been to evaluate the prospective companies that I’m speaking with and if getting orders is going to be a long-term process, and they have no existing business in the territory, then I don’t hesitate to ask for a fee. You and they have to realize that you’re taking time to meet their needs by taking time away from your existing principals. At the same time, you’ve got travel, entertainment, and other expenses related to running your company that you’re responsible for. On top of all those considerations, by asking for such a fee, you’re going to weed out those principals who aren’t serious about working with reps.”

Adding to the conversation was a Texas-based rep who explained, “I generally take out a map of Texas in front of the principal. Then I ask him how much he thinks it will cost him to travel the state as he prospects for new business. If he can do it in fewer than three days and for about $2,000, he’d be awfully lucky. If that’s what he wants to do, do it, try it for five years, and then let me ask him, ‘How’s business?’ It’s all going to come down to the fact that you’ve invested nothing in getting new business and you’ve gotten no new business for your efforts.”

Single-Person Agency Advantages

After discussing the positives and negatives of market development fees, the conversation turned to the subject of the perceived advantages of principals working with a small single-person agency vs. a large multi-person organization.

Starting things off one rep noted, “I have a rep acquaintance who has 55 lines on his line card. At the same time, he admits that he has virtually nothing to do with about 20 percent of the products he represents. The fact remains that there are some principals who just feel that they’re better suited to work with larger organizations. I counter that with the fact I only represent a handful of companies and I strictly limit the number of lines that I’ll take on. I’m laser-focused on what I do. I can turn on a dime. I’m not interested in getting the $50,000 order for the principal; I’m going after that million-dollar-plus account. The fact is I’m only going to take on a company because I want to work with them and I see a future for both of us in the relationship. Second, I work in a highly specialized industry and I speak the language of the customer. I tell the principal that if you want to get past the front door, I’m the one who can do it for you. I’d add that several of the companies I represent were startups when we began together and both of us have become profitable because of the relationship. I cite these relationships and use past sales managers as references when I’m speaking with prospective principals.”

Before the MANAchat ended, participants offered some of their thoughts on the subject of succession plans. At the outset of this discussion, it was noted that multi-person rep firms have usually taken the step to have a successor in place when the owner of the agency decides to leave the agency. “Many times it’s the son or daughter or other relative of the owner.” With the single-person operation, however, “they’ll just decide to pull the plug and the agency disappears.”

With that as an introduction to the subject, some other reps offered their thoughts. According to one rep, “My feeling is that as long as I can get out of bed, I’ll be there. If not, I’ll let my principals know a couple of years in advance so they can plan accordingly.” Another offered, “there’s probably not a lot for me to sell. My plan is to take the whole thing in for a soft landing. When this subject is brought up with my principals, I try not to focus on my age. Rather, I talk to them about how much business I can generate and how much I enjoy working with them.”

It was noted that MANA could be of assistance when it comes to single-person firms wishing to sell their firms. The association has a list of agencies that have been in business for years that may serve as prospective buyers or sellers of single-person firms.

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