The time has come for me to take the succession planning advice I have often given to manufacturers’ reps.

© Li Ding | stock.adobe.com

It has been my honor to serve as MANA’s CEO since 2011 and to help celebrate MANA’s 65th, 70th, and 75th anniversaries. But MANA’s future anniversaries, and there will be many, will be celebrated with a new CEO at the helm.

My thanks to MANA’s Board of Directors and staff for making it possible for MANA to support our community of reps and manufacturers with activities like:

• Developing the industry-leading platform for connecting reps and manufacturers.
• Championing Market Development Fees to both manufacturers and reps.
• Challenging 30-day termination clauses as a standard way to work with reps.

It is a bittersweet reality that my goal as a retiring CEO is to leave the association in such good hands that I will be remembered fondly but not missed organizationally. Your new CEO will take MANA to the next level. No one will be cheering more loudly from the sidelines than me.

As a reminder that CEO succession is the nature of things, I close with this 1949 message from the first person to have my role at MANA, P. Edwin Thomas:

The members of this National Association extend to you a sincere invitation to help make this Agent and Representative magazine* the “Common Meeting Place,” in the interests of “Economical Distribution” of the products of those who specialize in production but who, by size of circumstance, are not equipped, or prefer not to equip, to handle the selling function in all of its many ramifications and extenuations.

Manufacturers’ Agents, as “independent contractors and free agents,” are free from many of the restrictions applicable to private salesmen, in interstate and intrastate commerce, and their employment as a satisfactory sales outlet is every day being recognized by more and more producers and suppliers in every part of the country and in every industry.

* Later renamed Agency Sales magazine.

© PrettyVectors | stock.adobe.com

Last month I started a discussion about why Artificial Intelligence (AI) won’t be the end of reps. This month I share two stories that show why AI can’t replace reps.

AI Can’t Ask for a Favor

Someone at my principal in Europe decided to ship mounting hardware by ocean freight (eight-week delivery) instead of air freight (two-week delivery), so mounting hardware stock dropped to zero for six weeks. The factory’s message: “Tell your customers they have to wait.”

My principal’s products were useless without mounting hardware and customers’ production lines were shut down.

My largest customer was about to switch vendors. So I called another customer who had ample mounting hardware and asked for a favor. “I need to borrow 1,000 meters of mounting hardware for a month.” That customer let me borrow that hardware and I saved my largest customer. AI can’t do that.

AI Won’t Push Back

My largest customer had a rule. If you don’t increase your prices, you get to keep the business.

Every year my principal announced a routine 5 percent price increase. Every year I pushed back because prices in this product category actually were going down, and if the customer shopped around, they could get the same product for 30-40 percent less. Every year the factory backed off and this became one of their most profitable customers.

Then a sales manager who never met the customer took the account away from me and gave it to a direct salesperson 700 miles from the customer. And, when the factory announced its annual 5 percent price increase, the direct salesperson did exactly what he was told and insisted on the increase.

The customer found a new source for half the price.

AI is just like that direct salesperson. It does exactly what you tell it to do. Unlike AI, reps will push back when the factory does something foolish.

AI can’t do jobs that require trust and independent thinking. Those jobs will always go to reps.

© PrettyVectors | stock.adobe.com

A sonnet written by a machine will be better appreciated by another machine.
— Alan Turing, English computer scientist widely considered to be the father of artificial intelligence.

Will there always be reps?

That’s a question that I was asked when reps’ role delivering three-ring engineering binders was upended by online access to technical data on manufacturers’ websites.

That’s a question I was asked when online quotations and order entry processes eliminated many clerical tasks in reps’ offices.

And now it’s the question I am asked because Artificial Intelligence (AI) disrupts some services traditionally provided by reps.

What happened to reps when three-ring engineering binders faded away? Reps evolved! Reps became guides who helped customers drink from the fire hose of data suddenly available from manufacturers’ websites.

What happened when online quotations and e-commerce disrupted manual processes previously handled in reps’ offices? Reps evolved! Reps removed from their line cards some of the commodity product manufacturers who only valued reps for quoting and order entry services. Reps shifted their resources to launching CRM systems that let them give better information to their principals and better anticipate their customers’ needs.

What will happen as AI disrupts other aspects of the services reps provide?

AI will increasingly be adopted for roles that don’t require face-to-face contact. Reps will evolve and refocus their resources on roles that do require face-to-face contact.

• Reps will spend more time doing site visits to help solve their customers’ problems by integrating multiple products from their line cards into custom solutions.
• Reps will spend more time teaching and coaching their customers’ employees on the functions and applications of their principals’ products.
• Reps will be the conduit for insights and expertise they developed while solving one customer’s problems to be applied to their other customers’ problems.

Yes, there will always be reps, because reps are customers’ trusted face-to-face resources. And that is a role that websites, e-commerce or AI never can provide.

© Sergii | stock.adobe.com

“I put $3 million down that hole in the ground and never heard it hit bottom.” — Thomas Edison

When we think of Thomas Edison, we think of his successes. The electric light. The record player. But in 1881 he spent $3,000,000 to build machinery that he thought could extract iron from rocks that had only moderate iron content.

The Edison Ore-Milling Company never was profitable, and the money he put down that hole in the ground was equivalent to $90,000,000 in 2024 dollars.

Reps, like Edison, often have ventures that put their money into a hole in the ground. But, for reps, their “hole in the ground” is representing lines that bring in $50 for every $100 the reps spend promoting the line.

Reps, unlike Edison, can benefit from the experiences of their colleagues who burned daylight on lines that were never profitable and almost always say they let the situation go on for months or years longer than they should have.

And MANA membership includes a tool rep members can use to take the emotion out of assessing lines that might not belong on their line cards, MANA’s Line Card Profitability Analysis Workbook.

What’s in the Line Card Profitability Workbook?

• An assessment tool that takes into account a line’s income and the degree to which it really fits a rep’s line card.
• A step-by-step assessment example that makes the tool easy to follow.
• Adjustments for a line’s intangible contributions to a rep firm.
• Real-world case studies of reps who discovered one of their lines did not belong on their line card.

Ready to do line card profitability analysis on your line card? Download MANA’s Line Card Profitability Analysis Workbook in the member area of the MANA website, www.MANAonline.org, look for “Publications,” and also watch our 12-minute YouTube video, Line Card Profitability Analysis.

© murgvi | stock.adobe.com

“Some may think these trifling matters not worth minding, but they should remember that human felicity is produced by little advantages that occur every day.”
— Benjamin Franklin

What did Franklin mean? One example dates back to the days when America was still a British colony.

Streets were lit at night by oil lamps, with the flame protected from the wind by blown glass globes. Franklin observed two issues with that practice:

1. Breakage was a problem because blown glass globes had to be imported from England, a time-consuming and costly process.
2. Soot from the flame darkened the globes, reducing the illumination they provided.

Franklin designed a replacement for the globes with four panes of flat glass. When street lamps were damaged, flat glass to repair them was readily available. His design also left an open chimney at the top to let soot escape before the glass was darkened.

I can share two more modern examples of small changes from MANA’s journey to advance the professionalism and use of independent manufacturers’ representatives:

1. By capturing statistical data from searches in MANA’s RepFinder® database, we now send quarterly emails to rep members to let them know how many times their firm appeared in the results of RepFinder® searches.
2. We had so many best practices resources available to reps and manufacturers that finding the resources they needed was challenging for our members. So VP & GM Jerry Leth curated our resources to let members view our most important online resources.

• For reps, “Steps to Rep Professionalism.”
• For manufacturers, “Steps to Selling Through Independent Reps.”

Little changes like these can be just as important to MANA members as breakthroughs like MANA’s launch of the first rep search smartphone app.

What kinds of small changes could you make that would make a big difference to your customers or partners?

Do you have an example to share? Reach out to me by email at [email protected] with the details.

© klyaksun | stock.adobe.com

When manufacturers call me looking for help finding reps, I suggest that they take a lesson from gold miners. If you are looking for gold, start by looking for quartz.

Gold often occurs in between quartz crystals. Looking for quartz can help you find gold you otherwise would have missed.

How do you look for “quartz” during a rep search? Let me give you an example, and for the sake of this example, I will oversimplify.

Let’s say you’re a manufacturer of nails. You do a search for reps who sell nails and the list is disappointingly short.

It’s actually even worse than that, because the reps you found who sell nails already have a built-in conflict on their line card. They already represent a nail manufacturer: when you call them, many can’t represent you too.

Instead, you need to look for “quartz,” and search for reps who sell fasteners. Now you find reps who sell screws, nuts and bolts, but don’t have a line of nails. Perfect fit! But just a start.

Broadening the search, you also search for reps who sell complementary non-competing products. This takes some thoughtful reflection on your part. What kinds of reps would have great contacts to sell nails? Reps who sell hand tools, like hammers, would have great contacts to sell nails.

I suggest that manufacturers ask themselves, and perhaps some of their best customers, “In addition to my products, what else do my best customers buy?” Then they can get some categories that give better results.

If you are a manufacturer who needs help finding reps or a rep who needs help getting found by manufacturers, reach out to MANA by email at [email protected].

© neirfy | stock.adobe.com

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 [email protected] or by phone at 877-626-2776.

© ipuwadol | stock.adobe.com

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 [email protected].

© viktorijareut | stock.adobe.com

“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.

© ricka_kinamoto | stock.adobe.com

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

© fran_kie | stock.adobe.com

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?”

© Dilok | stock.adobe.com

“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.

© EWY Media | stock.adobe.com

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.

© dbrnjhrj | stock.adobe.com

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.

© ogieurvil | stock.adobe.com

“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.”

© captainvector | stock.adobe.com

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 [email protected].

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/

© Maxim_Kazmin | stock.adobe.com

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.

© Maxim_Kazmin | stock.adobe.com

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.

© Eucalyp | stock.adobe.com

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.

© EKH-Pictures | stock.adobe.com

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.

© rikkyal | stock.adobe.com

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).

© GraphicsRF | stock.adobe.com

“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.”

© 3desc | stock.adobe.com

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.

© crizzystudio | stock.adobe.com

“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.