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Yes, sometimes reps write a six figure or seven figure deal and get to keep all the money. And it happens more often than you’d think.

How does this happen? It happens when the rep sells their rep firm to a new owner and retires.

What kind of difference would a six-figure or seven-figure payday make in your lifestyle after your retirement? Enough to put in some serious planning? Of course!

Can you answer “yes” to these questions? And if you can’t, would the possibility of a six-figure or seven-figure payday be enough to motivate you to work on changing any “no” answers to “yes”?

• Have I identified a willing and able buyer, either within my own company or outside it?
• Have I kept financial records to document for that willing and able buyer the financial returns he or she can reasonably expect after the sale?
• Have I structured my company so that this willing and able buyer can manage day-to-day operations after I’m no longer part of the company?
• Have I planned for the retention of key employees and principals after the transaction is completed?
• Have I secured the counsel of a rep-savvy attorney and a rep-savvy accountant to navigate the many potential legal and tax pitfalls of the transaction?

And with careful planning, the sale of a rep company can be a win-win for the buyer and the seller. One MANA rep reports he has purchased five rep companies over his career, earning the sellers a fair return on their entrepreneurial investment and allowing the buyer to assemble a regional rep powerhouse that stretches from Maine to Virginia.

MANA membership includes a wealth of resources for reps who are ready to give succession planning some serious attention. Visit the member area at www.MANAonline.org, click on “Steps to Rep Professionalism” and go to step 12, “Plan for Your Succession and Sell Your Rep Business.” Or contact us by email at mana@manaonline.org or by phone at 877-626-2776.

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You say you are a great rep.
Who else says so?
You say you are a great manufacturer to represent.
Who else says so?

Who else says so? Now, other MANA members can say so, and MANA will showcase these endorsements where manufacturers looking for reps and reps looking for manufacturers can see them. MANA rep members can endorse manufacturer members. Manufacturer members can endorse rep members.

How can I give endorsements? Log in to the member area of the MANA website. The first link in the Member Toolbox is “Endorse a MANA member.” Pick the member you want to endorse and check the appropriate boxes.

Manufacturer Endorsing a Rep
☑ Increases our sales in their territory every year.
☑ Is one of our most professional reps.
☑ Provides us with field intelligence about our competitors and changes in our industry.
☑ Has great contacts with the customers in their territory.
☑ Is a valued addition to our rep council.
☑ Protects our long-term relationship with a solid succession plan.
☑ Gives us timely and informative updates on their company’s activities.

Rep Endorsing a Manufacturer
☑ Gives us timely and informative updates on their company’s activities.
☑ Respects and values our rep firm.
☑ Has an active, well-organized, and productive rep council.
☑ Always pays commission in full and on time.
☑ Ships our customers high-quality products, on time, at fair prices.
☑ Provides us with high-quality sales leads.
☑ Gave us a fair and balanced rep agreement.

What’s the best way to get an endorsement? Give an endorsement. Whomever you endorse will get an email to notify them that you have endorsed them and a link encouraging them to endorse you.

Want to endorse a company that is not a member? Invite them to join MANA! MANA is proud to add this feature to the many benefits of your MANA membership. If you have any questions, please reach out to me at ccohon@manaonline.org.

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“I’ve become great friends with one of my reps,” said the manufacturer. “But he still is reluctant to give me blunt constructive criticism about our company. My rep says: ‘The nail that sticks up gets hammered down,’ which is why I started our rep council.”

A rep council is an advisory board assembled by a manufacturer from their rep sales force to provide feedback and advice to the manufacturer’s sales and management team.

Why Do Manufacturers Have Rep Councils?

1. Unfiltered Feedback: Because the rep council submits a group report to the manufacturer’s management team, individual reps don’t worry that their comments will be held against them.
2. Comprehensive Market Information: Rep councils gather information about customer trends, competitive pricing strategies, marketing initiatives, and customer trends from the entire rep network and assemble it as a single document for the manufacturers’ review.
3. Engaging Manufacturers’ Management With Reps: Top manufacturer managers often have misconceptions about reps, so meeting with reps during rep council sessions helps the management team understand the reps’ roles and needs.
4. Engaging Reps With Top Management: Nothing builds rep enthusiasm to sell for a manufacturer like feeling it has the ear of top management. Reps give more effort and make more sales for manufacturers when they connect personally with their manufacturer’s key decision-makers.
5. Trust: A rep council demonstrates the manufacturer’s support and understanding of reps’ roles, leading to increased trust between the manufacturer, better relationships, improved communication, and more sales.

What Do Rep Councils Get for Manufacturers?
Increased commitment from the rep sales force and more sales.

What Do Rep Councils Get for Reps?
More sales, bigger commission checks, and long-term relationships with their manufacturer partners.

How Do You Start a Rep Council?
MANA members can download our Special Report, Open Doors by Building an Effective Rep Council, in the member area of www.MANAonline.org.

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Network with MANA’s Board of Directors, MANA CEO & President Charles Cohon, and MANA VP & GM Jerry Leth.

Daniel E. Beederman, MANA’s legal counsel and a partner in Chicago-based law firm Schoenberg Finkel Beederman Bell Glazer, LLC, is our featured speaker.

Beederman will present: Rep Succession Planning — Why It Is so Important for Reps and Their Manufacturers? His presentation will include the following topics.

What Reps Need to Know About Succession Planning

• Should I recruit and hire my successor or merge with another rep firm?
• How do I set a valuation for my rep firm?
• How do I structure the sale or acquisition?
• What if you are not yet ready to sell or bring on new owners?

What Manufacturers Who Sell Through Reps Need to Know About Their Rep’s Succession Plans

• Do my reps have a succession plan to let their firms continue to serve my needs when the current owner retires?
• Am I at risk of abruptly needing to recruit, interview, evaluate and train a replacement rep firm?
• How do I tell my reps who don’t have succession plans that our relationship may be at risk if they don’t have long-term plans to protect my company’s sales in their territories?

Beederman will also be available for Q&A at the end of the session.

Seating is limited. You may be wait-listed if you are not among the first 20 to register.

Your $20 registration includes parking and a full breakfast. The event is being held at the Hilton Garden Inn O’Hare Airport, 2930 S. River Rd., Des Plaines, IL 60018.

Our agenda:

• 8:00-8:45 a.m. — Breakfast and networking with MANA’s Board of Directors, MANA CEO & President Charles Cohon, MANA VP & GM Jerry Leth
• 8:45-9:30 a.m. — MANA Board member introductions and Q&A
• 9:30-10 a.m. — Dan Beederman presentation

To register, visit www.manaonline.org/category/events

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What would the world of manufacturers’ reps look like if MANA did not exist?

Without MANA: What Do You Mean, Market Development Fee?

MANA championed Market Development Fees (MDF) so that manufacturers without existing sales in a territory can get the attention of high-powered rep firms whose customers trust them enough to take their recommendation and buy an unfamiliar brand.

A decade ago, pioneering lines couldn’t hire the reps they wanted, and reps who took on pioneering lines often worked for free until orders started to flow.

Thanks to MANA, most reps considering a pioneering line know to ask for MDF, and many manufacturers offering pioneering lines expect to include MDF in their contracts.

Without MANA: Decades of Service, 30-Day Notice in Rep Contracts

MANA’s educational activities have helped reps learn to articulate why 30-day termination clauses often are unfair and helped manufacturers to understand that 30-day termination clauses are no longer automatically part of rep agreements.

Without MANA: Any Income is Good Income

Educational programs from MANA and MRERF have helped Line Card Profitability Analysis gain credibility so that reps can identify and exit relationships that cost more to service than the income they generate.

Without MANA: Rudimentary Rep Search

Manufacturers made it clear — they join MANA to find reps. Reps made it clear — they join MANA to be found by manufacturers. So MANA created the industry-leading platform for connecting representatives and manufacturers. Our RepFinder® 3.0 smartphone app and browser-based RepFinder® are a decade ahead of any other rep search platform on the Internet.

After a dozen years as MANA’s CEO and president, I am humbled by the ways MANA’s Board of Directors has guided the evolution of our industry and MANA’s staff has executed the Board’s vision.

What would the world of manufacturers’ reps look like if MANA did not exist? You don’t even want to think about it!

Let me tell you a story. I struck up a conversation with a rep at an industry event. The rep glanced to the left and right. Then the rep lowered their voice and said: “Can I tell you a secret?”

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“Most of my principals pay about the same commission percentage. But I give one of them more attention than any other line, probably more than their commission checks really justify. It’s because they treat me so well that they have become my ‘emotional favorite.’”

The ways reps talk about their “emotional favorites” are pretty consistent:

1. “They let me know how much they appreciate me and treat me like ‘one of the family.’ Most of my principals don’t do that. Of course, I work harder when I’m part of the family.”
2. “They respond fast so I can give my customers answers right away. They make me look good to my customers, and my reputation with my customers is my livelihood.”
3. “They treat me as a business partner instead of trying to be my boss, and they value my input.”
4. “They pay me like clockwork every month. That’s a tangible way they demonstrate how much they value my efforts.”
5. “They let me make a fair profit. I’m not looking for them to make me rich, but letting me consistently make a fair profit on all my sales shows that they want me to thrive and be their business partner for a long time.”

Then the rep looked left and right again, and their voice dropped almost to a whisper. “You know, it would be a tough conversation for me to have with my other principals to tell them why they are not my ‘emotional favorite.’ But they really need to know why they are not and how they could become the ‘emotional favorite’ of all their reps. Could MANA do something to help get out the word?”

Mission accepted.

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Reps will tell you two of the same things that Lewis and Clark would have told you.

1. Sometimes the only way to discover what’s out there is to go and look.
2. When we go out and look, some of the value we generate won’t benefit us immediately. But often, we can store that value and use it strategically when the time is right.

Going out and looking, exploring the territory, and meeting people face-to-face were why Lewis and Clark left Missouri to explore the newly-acquired Louisiana Purchase in 1804. Going out and looking, exploring the territory, and meeting people face-to-face is also how many reps describe their careers.

Generating something of value that won’t benefit us immediately is something that Captain Meriwether Lewis wrote about in his journal on June 9, 1805.

“We determined to deposit at this place … all the heavy baggage which we could possibly do without, and some provisions, salt, tools, powder and lead &c., with a view to lighten our vessels … Accordingly, we set some hands to digging a hole or cellar for the reception of our stores. These holes in the ground, or deposits, are called, by the engages, ‘caches.’”

What value do reps generate as they travel that they cache along the way to use later?

They build and cache strong relationships with customers who are not yet ready to buy that will get them access to decision makers when needed. They cache reputations as trusted resources so customers who need their products will call them and buy from them. They cache goodwill that will eventually turn into orders.

Because reps know that even though they start their careers by deciding to go out and look, eventually, their territory won’t be a pioneering territory.

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A quote from Sir Winston Churchill reminded me how much of our futures were determined by the first manufacturer we worked with when we launched our rep firms.

We rarely consider how our futures were decided when we signed up with a line that seemingly came our way as if by a throw of the dice.

For many of us, our first job was working for a manufacturer or distributor. We had never even heard of reps. When we eventually learned about reps and started rep firms, we took a path less traveled that determined our futures.

How would your life be different if your first line was die-casting instead of plumbing fixtures?

• It would have changed your ideas about how to go to market. Instead of selling through distributors, you would have been selling direct. Instead of having a warehouse, you would have worked from home or an office building.
• The conferences and conventions you attended would have clustered in different regions. When you stretched business travel into a vacation, the places you visited would have been different.
• Your customers would have been different, so none of your business friends would have been the same.
• And more than a few of us have met our spouses during a sales call we would never have made if our products had been different.

When we are young and just starting our careers, we think we are shaping our rep firms. As we become older and more reflective, we realize how much our rep firms really shaped us.

* My apologies to Sir Winston Churchill for adapting his quote. “We shape our buildings; thereafter they shape us,” said Sir Winston Churchill in his speech to the meeting in the House of Lords on October 28, 1943, requesting that the House of Commons bombed out in May 1941 be rebuilt exactly as before.

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“I just got a call from a prospective principal who has an exciting product but no existing sales in my territory,” said the MANA rep member who wrote to me for assistance.

“The manufacturer said, ‘You’re calling on those customers anyway. It doesn’t cost you anything to mention my product while you are there.’ Can you help me write an email that explains opportunity cost?”

This is a common problem, so I am sharing my response in this issue of Agency Sales magazine.

Let’s say that you have a line called Alpha. Historically, if you make five sales calls to promote Alpha, you earn an average of $1,000 in commissions. So every sales call you make to sell Alpha products earns you $200.

Let’s also say that you take a pioneering line called Beta. And you know from experience that it will take a year of promoting an unknown brand before customers get comfortable enough to start to buy it. During the first year, you earn zero dollars for each Beta sales call.

When you go into a customer to make a sales call, you can either promote Alpha and make an average of $200 or promote Beta and make zero dollars.

You lose out on the $200 average commission you would have made if you had promoted Alpha every time you promoted Beta. So $200 is your opportunity cost when you make a Beta sales call.

That is why reps who take on a pioneering line frequently receive a monthly Market Development Fee (MDF). The MDF contributes toward offsetting the rep’s opportunity cost when they take on a pioneering line that may not pay any commission during the first year a rep takes it on.

To learn more about Market Development Fees, visit the “Steps to Rep Professionalism” program on the MANA website (www.MANAonline.org). See step 3, “Developing/Pioneering New Markets With Professional Manufacturers’ Representatives.”

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It’s always a pleasure to help a MANA member sort out a thorny problem and hear them say, “If there is ever anything I can do to help MANA, please let me know.”

MANA VP and GM Jerry Leth and I have probably heard this offer hundreds of times. But we rarely had a way to take those members up on their offers.

Now there is something we can ask for that MANA’s members can do to help MANA grow its membership. And we’ve come up with a way to thank MANA members who take the time to help.

How can you help? Put a link to MANA on your website!

How does this help? One of the ways that Google ranks the importance of MANAonline.org is to count how many other websites link to MANAonline.org. The more websites that link to MANAonline.org, the higher MANAonline.org goes in Google search results.

Can I see an example of a link? Absolutely! MANA rep member Kelly Smith, Innovative Technical Sales, Tipp City, OH, wrote an excellent blog post that strongly endorses MANA as the “go-to” resource for finding reps and included a link to MANAonline.org. You can see the blog post at:
https://innovativetechsales.com/how-to-find-a-good-rep-firm-to-sell-my-products/

Need a MANA logo to include on your website? Let me know, and I’ll send it right away!

How will we thank you? Agency Sales magazine will publish a monthly Internet Honor Roll with the names of all MANA member companies that have a link to www.MANAonline.org on their website.

How do I get listed? Add the link to your website, and email the details to ccohon@manaonline.org.

What can you do for MANA? This is what you can do for MANA! And then watch Agency Sales for your company’s name on MANA’s Internet Honor Roll.

MANA logos for your use are available at: www.manaonline.org/about/logos/

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Celebrating MANA’s 75th anniversary last year led me to reflect on how MANA has transformed how reps and principals work together.

Last month part one of this series started to look at ways MANA has changed the rep industry just since I became MANA’s CEO and president in 2011. Part two of the series looks at more ways MANA has changed the rep industry since 2011.

Strategic Partnerships

Our strategic partnerships mean that all rep members of these associations are also MANA members:

• Association of Independent Manufacturers’ Representatives
• Canadian Electrical Manufacturers’ Representatives Association
• Industrial Supply Association
• Health Industry Representatives Association
• Heavy Duty Manufacturers’ Representatives’ Council
• International Housewares Association
• Power-motion Technology Representatives Association
• National Marine Representatives Association

Extended Post-Termination Commission

MANA’s educational activities have noticeably moved the needle on “standard” 30-day termination clauses by:

• Helping reps learn to articulate why 30-day termination clauses often are unfair.
• Helping reps learn to negotiate extended post-termination commission and life-of-part, life-of-program clauses.
• Helping manufacturers understand that 30-day termination clauses are no longer automatically part of rep agreements.

Line Card Profitability Analysis

A decade ago, most reps I spoke to felt that “any income is good income.” Educational programs from MANA and MRERF have helped line card profitability analysis gain credence, so reps can identify and exit relationships that cost more to service than the income they generate.

International Connections

In 2011 MANA only had visibility to rep practices in the U.S. and Canada. Through the Internationally United Commercial Agents and Brokers (IUCAB), MANA is connected with its rep association counterparts in 17 European countries, Peru, and the Republic of Congo.

Thank you to current and past MANA Boards of Directors for the support and insight that helped MANA transform rep-principal relationships and set the stage for continued transformation of our industry.

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Celebrating MANA’s 75th anniversary last year led me to reflect on how MANA has transformed how reps and principals work together.

In this two-part series, I look at ways MANA has changed the rep industry just since I became MANA’s CEO and president in 2011.

Rep Search Reinvented

MANA’s Board of Directors set a goal that MANA would create the industry-leading platform for connecting representatives and manufacturers. MANA now has revolutionary smartphone app and browser-based matchmaking that outperform any other platform on the Internet.

Market Development Fees

MANA’s educational campaigns have dramatically changed awareness of Market Development Fees (MDF).

Reps I spoke to in 2011 who were taking on pioneering lines often worked for free until orders started to flow because “that’s how things are done.” Thanks to MANA’s work to champion change, now most reps considering a pioneering line know to ask for MDF, and many manufacturers offering pioneering lines expect to include MDF in their contracts.

Academic Awareness

Two common complaints from reps are:

• Recent college graduates reps’ principals hire as regional managers know nothing about reps.
• Recent college graduates reps try to recruit for their own companies won’t go to work for a rep because they know nothing about reps.

The solution is to get information about reps included in academic curricula. However, the only way to get academic decision makers to include information about reps in academic curricula is with the credibility that comes from having articles about reps appear in academic journals, which has not happened since the 1980s.

MANA played a critical role in turning this situation around, and in 2022 articles about reps appeared in The Journal of Personal Selling and Sales Management and Industrial Marketing Management.

Next month in Part 2: Strategic partnerships, extended post-termination commission, line card profitability analysis, and international connections.

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It’s a common reason for reps to call MANA — but the reason this rep was not getting paid was not common. I’ll let the rep explain.

“My business model is not unusual,” said the rep. “I have a geographic territory with all my principals. I call on decision makers in my territory who decide what brand of products their company will use.

“If I am successful, those decision makers standardize on my principals’ products and buy them from one of the stocking distributors in my territory. I get paid commission on anything distributors in my territory buy, so it doesn’t matter to me which distributor the customers in my territory buy from.

“Except that many companies I convinced to use my principal’s products have been buying from distributors outside my territory lately. I did all the work, but the rep whose territory includes the remote distributor has been getting the commission.”

“My principal agrees that this is unfair but claims their hands are tied. What can I do?”

If the principal is serious about allocating commission fairly, there is a solution.

Your principal’s current commission model is called Point of Purchase (POP). The rep whose territory includes the distributor’s location gets the commission.

But there is another commission model. It’s called Point of Sale (POS).

In a POS commission model, the principal pays sales commission when the distributor sells the product to the distributor’s customer. The principal assigns sales commission to a rep based on the distributor’s customer’s location instead of the distributor’s location.

How does the principal know when a rep has earned a sales commission? The distributor provides a POS report to the principal, which may name the customer or may only list the customer’s zip code.

Is this an undue burden on the distributor? Probably not, because off-the-shelf distributor software often includes this functionality. Is this an undue burden on the principal? No, because the principal still only pays the commission once, based on which rep really earned the sale.

And everyone benefits when the rep doing a great job never has to say, “I need help to get paid.”

Note: The rep’s comments have been edited for length and clarity.

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The year was 1947. Harry S. Truman was president, the World Series was televised for the first time (the New York Yankees beat the Brooklyn Dodgers in seven games), and Chuck Yeager broke the sound barrier. And on October 17, 1947, the Manufacturers’ Agents National Association joined the community of not-for-profit trade associations.

Fast forward to July 1949, and MANA members discovered the first 24-page issue of The Agent and Representative magazine (eventually renamed Agency Sales) in their mailboxes.

Digging through the first few issues of The Agent and Representative
reveals how much MANA has changed and also how much it has remained the same.

In those first few issues, we find sentences like, “I know it’s customary for men who call themselves and believe themselves to be ‘practical men’ to pooh-pooh anything savoring of academic classification in salesmanship.” No thought of women as salespeople or as customers in those earliest editions. But in today’s MANA, woman-owned firms are common, and Michelle Jobst currently serves as MANA’s first woman Chairperson of MANA’s Board of Directors.

Another glaring change since 1949 is that, although manufacturers were invited to advertise in our magazine, the articles in that 1949 issue focus solely on the needs of manufacturers’ representatives. Today Agency Sales strives to be relevant to manufacturers and manufacturers’ representatives. And, also for the first time, a manufacturer (Charlie Ingram of Eriez Magnetics) served on MANA’s Board of Directors from 2017-2021.

What hasn’t changed? The very first issue of The Agent and Representative reminded reps to get written agreements by telling the story of a manufacturers’ representative who failed to get a written agreement and was fired so the manufacturer could cut the customer’s price by the amount of the rep’s commissions.

Thank you to our members who made this 75-year journey possible and entrust MANA’s staff and Board of Directors with the responsibility to continue MANA’s proud legacy.

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One of the best parts of being MANA’s CEO is the opportunity to have conversations with MANA members. Conversations with reps. Conversations with manufacturers who are already working with reps or who want to learn how to work with reps.

For the last two years, most of those conversations have been on the phone or over Zoom. It’s just not the same.

Now MANA’s first Live and In-Person event in two years is on the calendar!

We hope you can join us for breakfast from 8-10 a.m. on October 24* at the Hilton Garden Inn O’Hare Airport and network with MANA’s Board of Directors and staff:

• Michelle Jobst, Board Chairperson
• Keynae Agnew, Board Member
• Tommy Garnett, Board Member
• Marnee Palladino, Board Member
• Sid Ragona, Board Member
• Lisa Wilson, Board Member
• Charles Cohon, MANA CEO and President
• Jerry Leth, MANA Vice President/General Manager
• Daniel E. Beederman, MANA’s legal counsel

After breakfast and networking, MANA’s legal counsel Daniel E. Beederman will present important information on rep contracts.

Your rep agreement with a significant line has all the correct language to protect your commissions, so what could go wrong? A lot!

During the half-hour presentation, Beederman will discuss how reps can inadvertently undermine or even change the terms of a contract by:

• Things they do or don’t do.
• Things they say.
• How they respond to proposed contract amendments.
• How they meet or miss deadlines to protect their rights.

Your $20 registration includes parking and a full breakfast. Pre-registration is required. If you are not among the first 20 to register, you may be wait-listed. Register today at www.manaonline.org/category/events.

We look forward to seeing you October 24! Live and In-Person!

* Program details and attendees were current as this issue of Agency Sales went to press. For up-to-date details, visit MANA’s website (www.MANAonline.org).

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“I want to hire some reps for the new product I am bringing out in six months,” said the manufacturer who called me. “Can you help me?”

My response was not what she wanted to hear, but it was what she needed to hear.

“I’m glad to hear about your interest in reps. Reps will be the best way to take your new product to market. I understand your eagerness to start recruiting reps right away. In your shoes, I also would want to start “getting my ducks in a row” before my product was ready to launch.

“With apologies, though, my experience working with reps suggests this will not be effective. Reps you contact before your launch are most likely to respond in one of two ways:

1. “Your prototype looks great, but I only get paid once I actually sell something. If you don’t have anything I can sell yet, there is no way for me to get paid, so I will need to wait until you have a product I can sell and you can ship to a customer before moving forward.”
2. “I don’t doubt that you intend to launch your product, but I have had previous experiences where I have started to work on a product, only to discover that some unanticipated issue arose, and the product never launched. Lots of things can happen. A major investor can back out, there can be a regulatory issue like a failed environmental test, or a competitor can unexpectedly corner the market by launching ahead of you. I am ready to start once you launch, but I can’t start before you launch.”

“There is one other option. You could offer reps you hire pre-launch a monthly Market Development Fee to start selling now. But if you pay reps to start selling pre-launch, their customers will probably say: ‘Sounds great, come back and talk to me again later when I can actually buy this product.’”

Whether you are trying to recruit reps or customers, as my late father used to say, “You can’t sell from an empty wagon.”

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A very successful rep recently called to share his experiences with Market Development Fees (MDF).

“MDF are an excellent way for manufacturers with no existing sales and no name recognition to access a more experienced rep like me who usually would not take on their product line.

“Normally, I can’t afford to take on a ‘pioneering’ line. After all, during most sales calls, customers usually give me only 30 to 45 minutes, which means I focus that time on two or three principals that are already generating commission income.

“Principals with no existing sales who offer MDF share the cost of introducing their unknown product into my territory. MDF don’t cover all my costs, but they do mean that I’m not shouldering the entire cost of introducing a new product to my customers.

“I had an interesting conversation about MDF with a manufacturer who asked: ‘But what will happen if I pay you a monthly MDF and there are no sales?’

“My answer was straightforward: ‘I am meticulous about only accepting MDF from manufacturers whose products fit my customers and market space, so I always bring my MDF manufacturers solid opportunities. Sometimes those opportunities don’t turn into sales, but the reasons have been things like the manufacturer:

• Didn’t have enough staff to prepare a proposal on a timely basis.
• Didn’t have the plant capacity to accept the orders I tried to bring them.
• Couldn’t sell their product at price levels that similar manufacturers were offering in my market.

“Sometimes, I invest 6-12 months of work on a pioneering line only to discover that they did not have the resources to capitalize on the opportunities I brought them. Sharing those up-front costs limits my potential losses and is the only way for me to take on the risk of a pioneering line.”

Note: The rep’s comments were edited for length, clarity and content.

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“A society grows great when old men plant trees in whose shade they shall never sit.” — Greek Proverb

What trees does MANA plant to help ensure the rep industry’s future? Here’s an example.

Reps struggle to recruit recent college graduates as employees, in part because college classes don’t mention reps. Why don’t college classes mention reps? Because decision-makers who pick the content for college classes have never heard of reps.

Where do those decision-makers gather the content they include in college courses? Academic journals, so this is where we must plant the seeds for trees in whose shade we may never sit.

In 2018 I first met with Trond Bergestuen, a Ph.D. candidate writing his thesis on manufacturers’ representatives. I helped him gather the data he needed to write and defend his thesis and earn his Ph.D. I continued to work with Trond to help him with articles about reps for academic journals.

Trond’s first two articles have been published in highly respected academic journals.

• “Dual distribution systems: Investigating their effects on independent manufacturers’ representatives’ perceptions of manufacturers,” Journal of Personal Selling & Sales Management, November 22, 2021.
• “Principal-independent manufacturers’ representative relationships: Review, synthesis, directions for future research,” Industrial Marketing Management, January 31, 2022.

After helping Trond collect the data he needed for articles about reps in North America, I connected him with my counterparts in Europe. They are assisting him with data collection that will allow him to write articles comparing and contrasting North American practices with European practices.

As more articles like these reach academic decision-makers, more information about reps will become part of future college classes. In the future, recent college graduates will know about the rep industry and give us strong consideration as they begin their careers.

I can’t say when we will be able to sit in the shade of the seeds that were planted in 2018, but I can tell you that those saplings have taken root and are thriving.

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Manufacturers’ representative firms have a lot in common with Olympic rowers. Just to qualify to compete, we have to be fast, agile and impressive performers.

But when it comes to line card profitability analysis, some of us forget what Olympic rowers know: To be winners, you have to regularly take the boat out of the water to clean and wax the bottom. And before the rowers get back in the boat, make sure that all of them still belong on the team.

Instead of doing regular maintenance, we just row harder. Instead of replacing weak line card performers, we just row harder.

Rowing harder instead of solving the problems that drag down your representative firm’s performance is not a solution. It’s a sure way to lose races. And losing isn’t what gets us up in the morning; it’s what keeps us up at night.

— Line Card Profitability Analysis Workbook

MANA’s Line Card Profitability Analysis Workbook is a tool that helps MANA rep members objectively evaluate how much of their time each principal deserves. It’s free to download in the member area of MANAonline.org.

The workbook helps reps objectively gauge how well each secondary line fits with the firm’s primary lines and whether the commission income from each line justifies each line’s time demands.

Objective analysis includes asking questions like:

• How well does this line complement the rep’s primary lines?
• Is this line a “door-opener?”
• Does this line have the potential to open new markets to my rep firm?

But recently, I realized that two more questions are needed to make this analysis complete:

• Is this a line that gets me out of bed in the morning, or is it a line that keeps me up at night?
• If I resigned this line tomorrow, would I feel regret or relief?

Regret or relief? The most revealing question you could ask, and one you should ask yourself at least annually.

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A perpetual stew, also known as forever soup, is a pot that is never or rarely emptied all the way, and ingredients and liquid are replenished as necessary. Foods prepared in a perpetual stew have been described as being flavorful due to the manner in which the ingredients blend together, in which the flavor may improve with age. — Wikipedia

The year was 1947. Harry S. Truman was president of the United States, and a group of manufacturers’ reps decided to band together to exchange best practices and elevate their industry’s professionalism.

The best practices that those reps shared in 1947 included protecting their commissions, negotiating rep agreements, and coping with house accounts.

Those discussions were the first ingredients in a perpetual stew of best practices that have been simmering at MANA for 75 years. Since then, we’ve stirred additional best practice ingredients into the pot, including:

• Writing rep business plans.
• Finding the best lines to represent.
• Developing new markets with pioneering lines.
• Negotiating win-win rep agreements.
• Analyzing your line card.
• Leveraging new technologies.
• Managing house accounts and split commissions.
• Working with international principals.
• Forming rep councils.
• Planning to sell your rep business.

With 75 years of best practices to choose from, the pot eventually started overflowing. So we curated the ingredients into a list of our most valuable best practice resources. The result was two curated lists in the member area of MANAonline.org:

• For reps: 12 Steps to Rep Professionalism
• For manufacturers: 9 Steps to Selling Through Independent Reps

The very best from 75 years of collecting the best practices, all in one place and all included in your MANA membership.

It’s food for your brain and for your business success. Soup’s on; come and get it, available exclusively to MANA members.

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“I need to sell more aluminum die castings,” said the manufacturer. “So I downloaded a list of reps who sell die castings and started making phone calls.”

“Most of them said, ‘I already represent a die casting company, so I can’t represent you,’” he continued. “What am I doing wrong?”

It’s a common question, so I was ready with an answer.

“Reps very rarely represent two competing manufacturers of the same product,” I explained. “Your list probably includes some reps who only have copper and brass die castings and can represent your aluminum die castings, but it is also is going to include many reps who can’t sign up with you.”

“What you need to do is download a list of reps who sell complementary, non-competing products.”

“What do you mean by complementary, non-competing products?” asked the manufacturer.

“It’s probably easiest if I give you an example,” I continued. “Let’s say you’re a manufacturer of nails. So, you search for reps who sell nails.

“They won’t all have conflicts. If you make roofing nails and a rep on your list only sells finishing nails, it won’t be a conflict, but most reps who already represent a nail manufacturer can’t take on your product.

“So, you search for reps who sell fasteners, and you find reps who sell complementary, non-competing products, like screws, nuts, and bolts, but don’t have a line of nails. They call on the right customers, don’t have a line card conflict, and could be a perfect fit.

“But you want to interview a deeper pool of reps, so you give some careful thought to other complementary, non-competing products. Reps who sell hand tools, like hammers, would have excellent contacts to sell nails.

“Ask yourself, and perhaps ask some of your best customers, ‘In addition to my products, what other products do you buy frequently? You should get some good categories to use for your rep search and get the right reps in place to grow your sales.”

Note: The manufacturer’s comments were edited for space, clarity and content.

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In my January editorial, I quoted a manufacturer who regretted a hiring mistake that put $200,000 of his company’s money down the drain:

“My problem is not that I have been searching for direct sales­people and didn’t find qualified candidates. My problem is that after a long search that didn’t turn up qualified candidates, a year ago I got impatient and decided to settle on the least problematic of the candidates who did apply.”

“Between salary, expenses, and medical insurance, I have spent $200,000 on the salesperson I hired a year ago, and I have absolutely nothing to show for it. $200,000 down the drain. That’s why I am calling you today to talk about reps.”*

The manufacturer and I spoke about the benefits of using reps, but only later did I realize what may be the most important reason to use $200,000 to hire 8-10 rep firms instead of one direct salesperson. Not putting all your eggs in one basket.

Spend $200,000 on one direct salesperson, and if that salesperson fails, “$200,000 down the drain.” Spend $200,000 on hiring 8-10 rep firms, and even if one or two turn out not to be a good fit, most of the reps will succeed, and you will still get a good return on your $200,000 investment.

It’s the same reason that savvy investors like Warren Buffet recommend buying shares in an S&P 500 fund instead of gambling on just one single stock: Diversification. A single stock may tank, but a diversified investment isn’t as risky, so your winners will probably outnumber your losers.

That’s another reason manufacturers should spread their sales investment over a nationwide rep network instead of hiring a single direct salesperson.

Because it’s too risky to put all your eggs in one basket.

* The manufacturer’s comments have been edited for space and clarity.

The manufacturer on the phone asked a question I couldn’t answer.

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“I’m interviewing reps for a territory where my company has no existing business. I understand that a well-established rep can’t work for free, so I am willing to pay a monthly Market Development Fee (MDF). What should that cost?

Great question! So I asked a rep who often accepts new lines based on an MDF. The answer they gave me was puzzling: “How long is a piece of string?”

I asked for an explanation, and the rep happily supplied it.

“The point I am trying to make is that there isn’t enough information in your question to answer it. I need to know what the manufacturer needs before calculating an MDF. For example:

• “If the manufacturer asks me to make four calls a month on their behalf, the fee could be pretty modest. If the manufacturer wants 15 calls, the fee would be quite a bit higher.
• “If the manufacturer only wants monthly feedback by phone or text, the fee could be modest. If the manufacturer wants a formal written monthly report, the fee would be higher.
• “How many salespeople does the rep firm employ? A $1,000 monthly MDF won’t go very far if it has to be split between the salespeople of a 10-person rep firm.

“My rule of thumb for quoting an MDF is to start by calculating my cost to deliver the services they want. Then the MDF has to be at least 50 percent of my cost, so we will both have skin in the game.”

“If my MDF doesn’t fit their budget, then they need to accept fewer monthly sales calls and less reporting. Until I know the services the manufacturer requires, asking me to quote the cost of an MDF is pretty much like asking, ‘How long is a piece of string?’”

Note: This article combines several different conversations, which were edited for length and clarity.

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“There are worse things than unsuccessfully trying to find a direct salesperson,” said the manufacturer who called me today.

Let me tell you about the call.

Most of the phone calls I’ve gotten from manufacturers recently start out like this: “I have been trying to recruit a direct salesperson for quite a while, but none of the applicants that have contacted me are even close to qualified, so I need to talk to you about reps.”

Today’s call started out like most calls I’ve received recently. The manufacturer and I spoke about some of the more common reasons to use reps:

• Existing relationships with important customers.
• Market knowledge in their territory.
• Experience in their market space.

We also spoke about the fact that even in the current tough hiring environment, reps are still abundant for most markets MANA members serve.

I shared with the manufacturer that searching for direct salespeople and not finding qualified candidates was a common problem. Then he stopped the conversation to correct me.

“My problem is not that I have been searching for direct salespeople and didn’t find qualified candidates. My problem is that after a long search that didn’t turn up qualified candidates, a year ago I got impatient and decided to settle on the least problematic of the candidates who did apply.”

“Between salary, expenses, and medical insurance, I have spent $200,000 on the salesperson I hired a year ago, and I have absolutely nothing to show for it. $200,000 down the drain. That’s why I am calling you today to talk about reps.”

“So, you see,” he concluded, “There are worse things than unsuccessfully searching for a direct salesperson. Worse than unsuccessfully searching for a direct salesperson is unsuccessfully hiring a direct salesperson.

The manufacturer’s lesson learned: Take advantage of experienced, expert MANA rep members to take your product to market. And then you won’t have to call me about $200,000 that went down the drain.

Note: The manufacturer’s comments have been edited for space and clarity.

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Next year marks MANA’s 75th anniversary. A milestone anniversary often prompts discussions about how much has changed over the years. Discussions like: “In the future, will there still be manufacturers’ representatives?”

Yes, many things have changed. But when customers buy mission-critical products that make the difference between keeping their factories running smoothly and shutting down their production lines, there will always be a need for trusted resources. And those trusted resources are very often manufacturers’ reps.

I can’t think of a better example of the ways that some things don’t change than this excerpt from the September 1949 issue of The Agent and Representative (now MANA’s flagship publication Agency Sales magazine) written by manufacturers’ rep Edgar A. Wilcox, MANA’s first president:

“Chas B. Roth pointed out in our columns last month, in ‘The Selling Parade,’ that ‘salesmen’ are still not professionals. But ‘sales agents’ had better be professionals — in business, as they are, for themselves — although there admittedly remain many things yet to be accomplished for the well-being of such agency profession. MANA aims to elevate such profession in the opinion of manufacturers, suppliers and others, as well as in the opinion of agents themselves; to make it an object of true respect rather than of weakness or ridicule; and to improve its position morally, politically and legally.

“It takes energy, initiative, and a great deal of unselfish devotion to a cause to found and establish a national association like MANA — an organization in which any agent, no matter how large or small, may indeed be proud to be a member. It can mean more to you, bring you more satisfaction, and increase your income to a greater extent, than any group to which you as an agent could possibly belong.”

These words from 1949 could just as easily have been written last week. Sometimes, the more things change, the more they remain the same. One thing that has not changed, and probably never will change, is that there will always be a place for trusted resources like manufacturers’ representatives.

Helping manufacturers work effectively with reps is a primary reason MANA exists. So, manufacturers call all the time with questions about switching to reps.

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Until today, their reasons were pretty much always one of these three:

• “I need a salesforce that already knows best prospects and is a trusted resource to those prospects.”
• “I need a salesforce that is already familiar with our market space and our technology that can hit the ground running.”
• “I need a salesforce that sells complementary, non-competing products so I can ride the coattails of the manufacturers already on that rep’s line card.”

But the call I got today was different.

“I am in the process of switching to reps,” said the manufacturer* on the phone, “so I joined MANA for the educational materials. I have some questions about Shared Marked Development Fees and Life-of-Part/Life-of-Program rep agreements.”

At the end of our conversation, I asked: “How did you decide to go with reps?”

“I had no choice,” explained the manufacturer. “We tried to hire a direct salesperson, but we couldn’t find any qualified applicants.”

“However,” he continued, “as we dug deeper into the problem of finding salespeople, we discovered that there are abundant, highly-qualified manufacturers’ reps available to sell our products, so we went with reps instead.

“Other manufacturers must have discovered the same thing because, even though highly-qualified reps are readily available, we find that we have to compete aggressively with other manufacturers to get reps’ attention. That’s why I called to learn more about Market Development fees and ‘Life of Part/Life of Program’ commissions. We’ve had to offer more generous contracts to compete with other manufacturers, but we’re very impressed with reps we’ve been able to bring on board.”

Today was the first time I heard a manufacturer say: “I hired reps because I had no choice.” But it sounds like I will be hearing that again.

Note: The manufacturer’s comments were edited for space, clarity and content.

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It’s a little bit like science fiction.

What would a rep do if, one day, that rep woke up to find that the names of the companies on their line card were the same, but those companies were all subtly different?

• The people at the factory were subtly different.
• The products were subtly different.
• The service levels and policies were subtly different.

Did this rep wake up in a parallel universe?

Nope.

The rep woke up to find out that their lines are just not the same after 18 months of Covid.

• Some of the companies are grateful for the efficiencies they get from a commissioned sales force.
• Some of the companies have developed sharp elbows and started squeezing rep commissions.
• Some of the companies kept the experienced people who know how to keep production lines humming.
• Some of the companies cut staff too far, and everyone there is new and just learning how things work.

What’s a rep to do? Take the time to look at your line card and conduct a methodical Line Card Profitability Analysis. Does the commission earned from each line justify the time it takes to support each of those lines? Do all the lines fit my target market, or does supporting some of these lines pull me into areas that are not my core competency?

How can I do that methodically? I’m glad you asked.

MANA’s 18-page Line Card Profitability Analysis Workbook is free to download in the members-only area of www.MANAonline.org. Inside you’ll find worksheets and step-by-step instructions on how to create a Line Card Profitability matrix that will tell you which lines deserve more of your time, which lines deserve less of your time, and which lines may not belong on your line card.

Having trouble finding the workbook on www.MANAonline.org? Members can email us at mana@manaonline.org, and we’ll respond with the file.

“Based on my recent experiences, common courtesy is not common practice with reps,” said the manufacturer. “And, frankly, the absence of basic common courtesy gives the entire rep industry a black eye.”

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Is this manufacturer right? Let me share his story, and you be the judge.

This manufacturer joined MANA with high hopes of partnering with reps, and he embraced the idea of a win-win relationship. And MANA has at least 200 rep members in this manufacturer’s market space, so it’s likely that right rep is among our members.

“We tried all different ways to contact prospective reps. We tried email. We tried phone calls. We tried contacting them through their websites’ ‘contact me’ pages.

“We finally reached a few, and they were very personable, knowledgeable and helpful. But, overwhelmingly, we were just ignored.

“Any response at all would have been fine. ‘Not a fit for my line card,’ or ‘I have a competing line,’ or even just ‘I am not interested.’ But, with only a few exceptions, I got nothing. Radio silence. Zero.”

“If reps can’t respond when we reach out to them — even with ‘no thanks’ — then how can I trust that if they had our line that they would not ignore customers or prospects the same way they ignored us?

As reps, we are a community, and the actions of each of us impact all of us. Even if we are not interested in a line, there is probably a rep somewhere who would love to have that line. Taking a moment to respond to each manufacturer’s inquiry can go a long way to encourage that manufacturer to keep searching MANA’s RepFinder® for the right rep.

Let’s find time to say “no thank you” to manufacturers who don’t fit our line cards but could be a great line for another member of the rep community.

Note: The manufacturer’s comments were edited for space, clarity and content.

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Last week a MANA rep member thanked me for MANA’s work to champion Shared Market Development Fees (SMDF). In recent years, said the rep, manufacturers have become more and more receptive to SMDF, which he credited to MANA’s efforts to familiarize manufacturers with SMDF.

SMDF are monthly payments a manufacturer pays to a rep when the manufacturer needs that rep to pioneer a territory without existing sales. Because it can take a year for the first commissionable sales to close where that manufacturer’s product is unknown, the manufacturer pays part of the rep’s costs for pioneering activities.

MANA began championing SMDF because manufacturers with no market presence often ask reps to introduce unknown brands into their territories without compensation because: “You’re in there anyway, just add us to your sales call.”

“No,” MANA explained to manufacturers. “Customers give reps limited time during a sales call. So they lose income if they take time from a principal that generates commission income to talk about a principal that doesn’t.”

Later, we discovered that SMDF might benefit manufacturers even more than reps.

Why? Because professional reps with full line cards were always out of reach to manufacturers with lines that required pioneering. But SMDF can make reps who would never before have considered pioneering a line accessible to manufacturers who want the best reps to launch their brands.

Win-win for reps and manufacturers. That is what MANA is all about.

What else has MANA learned about SMDF? Written SMDF agreements are crucial so each party knows the other’s expectations, for example:

• How many sales calls on the manufacturer’s behalf does the principal expect?
• Does the manufacturer expect a monthly report on the rep’s activities? How detailed and how formal does that report need to be? Would phone calls and texts suffice?

MANA is proud to have moved the needle on SMDF. Want to share your SMDF experiences or suggest how MANA can move that needle further? Reach out to me at ccohon@manaonline.org.