Category Archives: Department

Finalizing the Rep Agreement While Procuring Your First Order

By

I am currently working behind the scenes with one of my sales rep clients in trying to finalize a sales rep agreement with an automotive parts supplier located in Europe. They have been working on this for many months.

The Problem

The principal was recently awarded close to $20 million in annual business from a major-tiered automotive supplier that was solicited and procured by my client. The original discussion before the business was awarded was that commissions would be paid at the rate of four percent of the net sales. This was included in the original draft of the sales … Read the rest

IUCAB Executive Committee Opens 2023 Meeting Schedule in Boston, Massachusetts

The first IUCAB Executive Committee Meeting this year took place on March 31, 2023, in Boston, Massachusetts, to strengthen the relationship between Europe and the USA.

Olivier Mazoyer, president, welcomed Vice Presidents Eeva Pakkanen from Finland; Charles Cohon from the USA; Ralf Scholz from Germany; Axel Sturmberger from Austria and Christian Rebernig, IUCAB secretary general; to the meeting. Matthew Tickle from the UK participated as observer. Vice Presidents Enric Enrech from Spain and Marco Righetti from Italy were absent.

Rebernig gave an overview of the financial situation of the organization and the social media activities of IUCAB (Internationally United Commercial … Read the rest

Lewis and Clark, and Reps

By
image

© 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.

What It Takes to Be a Successful Sales Representative and Business Entrepreneur

By

Recently I was reading the article in Agency Sales magazine entitled, “The Talk Part 2,” by Russ Sorrells. After reading the article, not only did I strongly agree with what I read, but I wanted to share personal experiences of how exercise, good nutrition, and mental health play such an important role in being a successful business entrepreneur. Additionally, after working 23 years in business operations for eight different companies, and operating L.S. Wilson & Associates, Inc., for 25 years this September, I wanted to share what personality traits I feel make a good sales representative.

What personality traits make … Read the rest

Defining the Meaning of Value

By

Manufacturers’ reps and their principals truly believe they are adding value for their customers. Despite this belief, however, many of them have seen their profit margins become razor thin because of deeper discounting, extended terms, and special offers. The question that should be front and center of everyone’s mind is this: “If we are adding value, why do our customers continue demanding lower prices?”

In answer to that ever-present question an industry consultant offered some thoughts that manufacturers ought to be sharing with their reps.

Customers have heard the promise of added value from advertisers and salespeople for years. Yet, … Read the rest

Internal Struggles — Know How Best to Divorce Your Business Partner

By

This article is designed to provide some basic and little-known information on how certain business corporation laws prescribe how to separate from, buy out, and deal with a business partner with whom you no longer wish to work.

Like any contracting, it is always best to draft the initial agreements with your business partners carefully after studying and considering all potential issues, good or bad, that may arise during your relationship. Also, plan for your separation in the beginning. This up-front work and expense will always be worth it. Litigation over a separation and doing so with a not-so-well-thought-out shareholder … Read the rest

ISA Launches New Emerging Leaders Channel Certification to Develop Next‑Gen Talent

On April 18 in Phoenix, Arizona, at the ISA23 convention, the Industrial Supply Association (ISA) announced the launch of its new Emerging Leaders Channel Certification (ELCC) — a multi-layered, channel-centered certification program designed to develop the next generation to lead.

“The ELCC is a program that companies within the industrial MROP industry have needed for years. It provides the opportunity to fast-track young talent in terms of their knowledge of how the channel works as well as their connections inside it,” said Alex Ruggles, immediate past chair of ISA’s Emerging Leaders Committee and director of customer service at Martin Supply, … Read the rest

“We Shape Our Rep Firms; Thereafter They Shape Us” *

By
Statue of Winston Churchill

© 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.

How to Effectively Use Trade Shows as a Complement to Market Strategy

By

If there is any common challenge that reps cite as they continue to enter the post-Covid sales and marketing environment, it’s that it has become ever more difficult to reach prospects and customers.

Long-tenured reps recall the days of being able to reach prospects via their cold calls when existing customers would readily be available in their offices. Today, however, buying decision makers no longer populate offices as they did prior to the pandemic. While many of them continue to work at home, others that do come into the office have been able to avoid contact with the outside world … Read the rest

Dealing With the Merry‑Go‑Round

By

It was a little bit like a self-fulfilling prophecy when one manufacturer described the difficulty he continually faced when it came to filling direct sales positions in a number of his territories.

According to the manufacturer, “It seems as if they (the factory direct salespeople) can’t wait to get out the door. We just get them trained and attuned to developing relationships in the territory and then they either take another position in our company or leave the company entirely. It’s like being on a merry-go-round that keeps spinning people off.”

This manufacturer is hardly alone in facing this problem. … Read the rest

Beware of Commission Plans That Calculate Compensation as a Percentage of Profit

By

One of the cases my office is currently handling involves a commission agreement that requires the calculation of compensation as a percentage of profit.

The Problem

The agreement provided that the principal would pay my client one-third of the “profit” for the sale of remanufactured air conditioner compressors sold to two customers.

Several years earlier, my client had procured the two customers for another remanufacturer of air conditioner compressors. When that manufacturer went out of business, my client purchased the remanufacturing equipment and started his own remanufacturing business. He continued selling remanufactured air conditioner compressors to the two customers for … Read the rest

As Long as You’re There Anyway….

By
image

© 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.”

Not the Only Woman in the Room Anymore

By

Last year’s Agency Sales articles about MANA’s 75th anniversary allowed me to mull over how MANA, the rep industry, and I have been reinvented over and over during my 29 years as a manufacturers’ rep. I am excited to share my perspective with you on these changes.

When I became a manufacturers’ rep, this was already a great industry, and MANA was its acknowledged gold standard. Today our industry has become even better, and I am proud to say that MANA remains its most important supporter and resource. I know I am not alone in this thinking.

My rep journey … Read the rest

How to Treat a Rep

By

In the course of an interview with a rep that focused on his long-standing relationship with one principal, the rep volunteered that while there were many reasons why the relationship has weathered the test of time, there were three very important attributes the principal possessed that the rep valued:

  • “The principal’s in-house rep-support teams are outstanding. When we contact them there is no problem left unsolved, no question left unanswered.”
  • “They generously support us in our joint field visits to customers, and they always allow us to take the lead in presentations to customers.”
  • “They have insisted that we complete
… Read the rest

Start at the End: Planning for Termination of the Principal-Representative Relationship

By

No one likes to think about the potential end of a business relationship just when they finally succeeded in getting it off the ground. But for independent sales representatives, addressing the rep’s termination rights at the beginning can make the whole relationship with the principal work better, can extend the duration of the relationship and can protect the rep’s investment of time and resources in developing business for the principal.

So, you’re a rep in contract negotiations with a new principal that could substantially expand your business and bottom line. Great! You’re probably focused on primary issues like commission rates, … Read the rest

Introducing MANA’s Internet Honor Roll

By
image

© 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 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/

Eight Elements of a Powerful Partnership

By

“No one can whistle a symphony. It takes a whole orchestra to play it.” — Halford E. Luccock

MANA’s “Partners in Profits” philosophy has contributed to so many successful rep-manufacturer relationships that when I saw research giant Gallup Inc.’s recent “Eight Elements of a Powerful Partnership” article, I knew it would be a valuable resource.

According to Gallup, those eight elements are complementary strengths, a common mission, fairness, trust, acceptance, forgiveness, communication, and unselfishness. Let’s drill down and see how those elements build and support great rep-manufacturer relationships.

  • Complementary Strengths

Reps’ strengths include local market knowledge, access to local decision … Read the rest

There’s Nothing Like Working Together

By

It’s no secret that reps don’t always react in a positive manner when one of their principal’s regional sales managers asks them to schedule joint sales calls.

One manufacturer, however, couldn’t miss the opportunity to pass along positive comments she received from a rep on his RSM. According to the rep, “The sales manager was very upfront when he told me not to be wary of selling other lines that I represent — when the opportunity presented itself. But the main purpose of his joint sales call visit was to make appointments with especially good customers for his products and … Read the rest

Arbitration — A Four‑Letter Word to Plaintiffs

By

Alternative Dispute Resolution (ADR) refers to alternatives by which parties can keep a legal dispute out of the public court systems — Superior Courts in each state and U.S. District Courts around the country. That sounds like a very good idea on paper; but certain ADR agreements can be a death sentence for a good plaintiff’s case, depending on the level of damages.

Principals will normally include an ADR clause in their representation agreements. That might include agreements between the parties to mediate a dispute (submit the dispute to a “neutral” who tries to bring the parties together in a … Read the rest

ISA23 Convention to Be the Best Networking Event in the Industrial Supply Industry

ISA (Industrial Supply Association) is proud to host ISA23, the leading industrial supply convention of 2023, from April 17-19 at the Sheraton Phoenix Downtown and Phoenix Convention Center in Phoenix, Arizona.

ISA23 is the perfect opportunity for companies within the industrial supply channel — including distributors, manufacturers, industrial manufacturers’ representatives (IMRs), and service providers — to network and build relationships with their peers and grow their network of contacts.

This year’s event is all about networking and helping attendees make valuable connections through a mix of different experiences. ISA23 will feature a charity golf outing on the championship golf course … Read the rest

AIM/R Comes Full Circle at Sandestin

AIM/R 2023 ConferenceAIM/R (Association of Independent Manufacturers’/Representatives, Inc.) will hold its 51st Annual Conference (September 12-15, 2023) at the Sandestin Golf & Beach Resort in Miramar Beach, Florida.

The theme is “Future’s So Bright!” The planning has begun for the 2023 Conference Chair — Michelle Lewnes-Dadas, CPMR, Preferred Sales, Inc. — and the Conference Committee. This year’s event brings a bit of nostalgia. Florida was the site for the 2000 and 2011 Annual Conferences, also led by Preferred Sales, Inc., team members Pete Lewnes, CPMR, and Alan Guidish, CPMR.

Mark your calendar now. Registration, housing and sponsorships will open in early March … Read the rest

Transforming the Rep Industry — Part 2

By
image

© 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.

Follow Up or Give Up!

By

Follow-up is the most cost effective and underutilized marketing tool available to a sales force in just about every single industry; however, effective follow-up is considerably more involved than simply sending one or two emails to see if the prospect responds.

While marketing is an important aspect of any business, there is no point in undertaking any form of marketing initiative if there is not first and foremost a well-thought-through follow-up plan that has the buy-in of the sales force. Simply put, it’s follow up or give up. In fact, a marketing plan with no follow-up plan is simply akin … Read the rest

Making a Partnership Work

By

A manufacturer recently wrote to Agency Sales about the relationships he enjoys with several of his independent reps. This manufacturer should be forgiven for his boasting because what he wrote about shows that he and his reps know what it takes to forge a strong relationship.

Here are a couple of the reasons why the manufacturer felt he was entitled to be so proud about how he works with his reps:

  • “We and our reps have worked long and hard at sustaining relationships. It’s a little like a marriage. If the little things go wrong and you start picking at
… Read the rest

Should Sales Teams Use Email, Telephone, or Personal Visits?

By

Emailing Customers

In the construction industry, it seems more and more communications are by email, whether conversations are interoffice, between companies, or by sales teams with customers. Using primarily email communication may seem to make us more efficient, but that assumption may not hold water.

Our inboxes are swamped. One study indicated that the average person across all industries receives an average of 115 emails per day. The study indicated that 57 percent of people do not even read all their emails! Many are simply trashed. How efficient is that?

The use of primarily email communication is led by millennials, … Read the rest

Industry Legend Bill Freeman Inducted Into AIM/R Hall of Fame

Oscar William “Bill” Freeman was inducted into the AIM/R Hall of Fame during a stirring ceremony at the rep association’s 50th Annual Conference at the Gaylord Rockies Resort in Aurora, Colorado on Friday, October 14, 2022.

Freeman’s honor was accepted by his wife, Sheree, and sons, Benn, Chase, and Mike, along with their spouses. They shared a touching tribute to their father among a crowd of fellow manufacturers’ representatives and manufacturers from across the industry.

“It’s a great honor, and we are all so happy they recognized Bill and all his hard work over the years. While our company wouldn’t … Read the rest

Never Really Normal

Regular readers of Agency Sales will remember enjoying chapters of retired plumbing rep Sig Schmalhofer’s book The Reputable Rep in the pages of this magazine. Sig has just informed us that his memoir, Never Really Normal, is now available from Amazon. Says Sig:

“I’m an immigrant born with a degenerative disease. After I stumbled and was bloodied in the distribution business, I launched Signature Sales — a rep firm that became successful when I chose a path that was, as the title says, never really normal. My memoir is an inspirational book that personifies the American Dream.”

(Sig’s previous … Read the rest

Transforming the Rep Industry — Part 1

By
image

© 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.

MANA Networking Breakfast and Rep Contract Discussion

MANA’s Board of Directors recently sponsored a very well-attended networking breakfast with MANA members and MANA’s staff close to O’Hare airport.

Dan Beederman, MANA’s legal counsel, made a presentation on rep contracts.

After breakfast, Daniel E. Beederman, MANA’s legal counsel, made a presentation on rep contracts. The presentation was followed by additional networking and Q&A with MANA’s Board, staff, and Beederman.… Read the rest

Playing the Ratings Game

By

It’s hardly uncommon for principals to rate the performance of their reps and for reps to rate their principals, but here’s a bit of a different twist to the ratings game.

A manufacturer recently informed us that she’s made it a regular practice to ask her reps to rate her performance with them. “Our motives are fairly clear cut,” she maintained. “We simply wanted to know where we stood above and beyond our competitors and the other lines that our reps carried. This was an outgrowth of the fact that we’re well aware of how most of our reps perform … Read the rest