Category Archives: Department

Live to Fight Another Day

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This article addresses a problem that arises frequently in my law practice, namely, unilateral changes made by a principal to the sales commission agreement. These changes often happen quickly and without warning. Needless to say, unplanned reductions in take-home pay can cause significant angst for both the salesperson and his or her spouse.

The Big Question

“What should you do when your principal unilaterally reduces your commission rate?” The answer is: “That depends.” We are currently litigating a case that involves this exact problem. The key facts of that case are as follows:

  • Our client had an oral agreement with
… Read the rest

ISA24 Annual Convention to Unleash Networking Excellence and Industry Trends

ISA24 logoThe Charlotte Convention Center is set to become the epicenter of the industrial supply industry as the Industrial Supply Association (ISA) gears up for its Annual Convention, ISA24, on April 15-17, 2024. More than just a meeting of industry professionals, ISA24 is where business gets done, connections are made, and the future of the industry is shaped.

Innovative and enjoyable networking activities at ISA24 promise to reshape conventional norms, aiming not only to build relationships but to solidify existing partnerships, offering an unparalleled experience of networking excellence that goes the extra mile.

Brendan Breen, CEO of ISA, emphasizes the significance … Read the rest

Million Dollar Deal. Rep’s Share: 100%

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

Delegate to Elevate

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The tasks business owners shouldn’t do and how AI and virtual assistants can help independent manufacturers’ reps.

In the ever-evolving landscape of entrepreneurship, independent manufacturers’ representatives play a crucial role in driving business growth and success for their factories. These owners have a unique set of challenges and opportunities, often wearing multiple hats to ensure the smooth functioning of their ventures. However, in the pursuit of efficiency and productivity, it’s essential for business owners to recognize the tasks they should avoid and harness the power of AI-driven tools like ChatGPT and virtual assistants to optimize their operations.

Running an independent … Read the rest

A Contract — Always!

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When a manufacturer heard a comment from an attorney concerning working with reps in the absence of a contract, here’s how he reacted:

“I can understand what the attorney was saying. He advised reps to be wary and to avoid contracts that were not fair to both sides. As a matter of fact, he stated his case quite succinctly when he said: ‘In the absence of a clearly worded contract that is fair to both the manufacturer and the rep, I’d advise the rep — if he really wants/needs the business — to go ahead without a written contract.’

“That’s … Read the rest

Risk Management: Navigating Employment Issues for Sales Agencies

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Running a manufacturers’ rep agency brings opportunities but at times can generate risks, especially when considering employment matters. This article presents an overview of those risks and suggestions for how to manage such risks.

Misclassifying Workers as “Independent Contractors”

Rep agencies use independent contractors or subreps for myriad reasons — “fit” for a particular situation, coverage for an open territory, flexibility and cost savings, as examples. While using independent contractors can provide significant benefits, misclassifying employees as independent contractors can lead to detrimental outcomes such as having to pay unpaid withholding taxes, back pay, penalties, fees and interest.

The IRS … Read the rest

Industrial Supply Association Announces New 2023-2024 Board of Directors

The Industrial Supply Association (ISA) is pleased to announce its newly appointed board of directors for the 2023-2024 term. Comprising a diverse group of industry leaders, the board will continue to uphold ISA’s mission of anticipating and serving the needs of its member companies, including distributors, manufacturers, and independent manufacturers’ representatives.

These volunteer leaders bring extensive knowledge, time, and experience to their roles and will be responsible for charting ISA’s strategic direction while overseeing initiatives that drive the advancement of the industry and the association.

The new board of directors consists of the following executive chairs:

  • Chair — Rob Keenan,
… Read the rest

MANA Board of Directors Nominating Committee Announces 2024 Candidates

MANA’s Board of Directors Nominating Committee is pleased to announce that it has approved applications to appear on the January 2004 Board of Directors election ballot from Marty Grimes and Marilyn Kahler.

photo of Marilyn KahlerMarilyn Kahler owns MANA rep member firm Tri-Fab Solutions of Scottsdale, Arizona. Her firm has been a MANA member since 2004.

photo of Marty GrimesMarty Grimes owns MANA rep member firm Assembly Solutions, Inc. of Fort Wright, Kentucky. His firm has been a MANA member since 2000.

Ballots will be distributed January 1, 2024. To be counted, all votes must be cast by January 31, 2024. Results will be published on … Read the rest

New From MANA — Endorsements!

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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 [email protected].

 

There’s Value in Trade Show Participation

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Edited by Stephanie Bray

While we may not be 100 percent back to the pre-Covid normal, things have opened up and face-to-face events are happening again, just as MANA Board Chair Tommy Garnett’s May 2023 editorial shares with us (and encourages us to participate in). As a longtime colleague of Garnett’s, I consider him something of a mentor and role model; perhaps my enthusiasm for trade shows is at least in part due to him.

My previous article mentioned how successful MARN’s post trade show campaign was without covering the value of the trade show itself. And while following up … Read the rest

Letter to the Editor

Editor’s Note: This Letter to the Editor could not be more timely. Now, MANA rep members and manufacturer members can endorse each other, so reps like Jim Rinehart can see what other reps say about manufacturers contacting them for representation.

For more information about how to endorse a MANA member or get a MANA member to endorse you, see Charles Cohon’s “MANA Minute” editorial in this issue of Agency Sales magazine.

Hello Charles,

I am asking you for input on my search for a new principal. As a one-man band and a very successful rep organization, I take on few … Read the rest

Always Rely on a Contract

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MANA has been especially active over the last several months when it comes to conducting MANAcasts and MANAchats during which association members can network and share solutions to various concerns and problems.

More than once during those sessions, the subject of contracts between reps and their manufacturers comes up. To that point, there’s never a bad time to emphasize to both reps and their principals that it’s critical to have and rely upon the terms spelled out in a written contract between the two entities for the following reasons:

  • While personal relationships and handshakes are great, they should never serve
… Read the rest

The Dangers of Keeping Secrets

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Most contracts between a manufacturer and a sales representative contain a trade secret and confidential information provision. Typically, this provision is one-sided — it protects the trade secrets and confidential information of the manufacturer and fails to address any such information for the sales representative — generically describes categories of information, is overly broad and includes all or almost all the information of the manufacturer’s business and not just its true trade secrets and confidential information. It also has the sales representative admit that all categories of information are true trade secrets and confidential information, and that the sales representative … Read the rest

AIM/R Welcomes Three New Members Into Hall of Fame

The Association of Independent Manufacturers’ Representatives (AIM/R) has inducted three new members into its Hall of Fame with the additions of Rick Banner, Stew Chaffee, and Mike Parham at the association’s annual conference in Miramar Beach, Florida, September 12-15, 2023.

Rick Banner was president and principal of Keyline Sales, Inc., a premier manufacturers’ representative agency in Southern California, from 1999 through 2016. He recently retired from his career in the plumbing industry, which began in 1974.

Banner served AIM/R as a board member, president in 2007-2008, and chairman and is one of AIMR’s first graduates of the Certified Professional Manufacturers … Read the rest

The Nail That Sticks Up Gets Hammered Down

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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.

Sales vs. Product Training

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If one manufacturer didn’t know beforehand that his agents thirsted after product training vs. sales training, he certainly knows it now.

That’s what the manufacturer reported after some input from several of his independent agents. According to the manufacturer, “I had several of my reps approach me with a request for training. But, at the same time, they were adamant that they didn’t want sales training. They were after product training. Their message to me loud and clear was that since they had already carved out successful careers for themselves as independent representatives, they knew what they had to know … Read the rest

How to Use ChatGPT and AI to Sell

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Feel like AI is taking over everything?

The rules keep changing on this, but what I want you to remember is this: ChatGPT is nothing more than a very hyperactive search engine. Don’t run from it! ChatGPT is a tool to leverage. Embrace it!

ChatGPT can give you a tremendous amount of information, but don’t think for a moment it’s going to replace you as a salesperson. Rather, keep one thing in mind: Not only are you using it to help you sell, but your customers are using it to help them make buying decisions. Let’s break this down.

Customers … Read the rest

Thoughts on Succession Planning

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Having served as legal counsel to hundreds of sales representatives, perhaps the worst type of call that I receive is from an owner of a successful sales rep agency who has waited too long to think about — let alone implement — a succession plan, but who now has an urgent need for one.

In many instances, the urgency for having a succession plan is compelled by one of the agency’s principals (manufacturers), which has threatened termination unless an acceptable succession plan is in place by a given (typically short) deadline. But, what if you (as the owner) are not … Read the rest

Industrial Supply Association Announces the Promotion of Brendan Breen to Chief Executive Officer

photo of Brendan BreenThe Industrial Supply Association (ISA) is pleased to announce the promotion of Brendan Breen, formerly the association’s president, to the position of Chief Executive Officer (CEO) effective September 1, 2023.

This key promotion reflects ISA’s commitment to fostering continuity, stability, and ongoing growth within the organization. The decision to promote Breen was taken in acknowledgment of his exemplary performance, strong alignment with the organization’s vision, and commendable leadership in driving ISA toward achieving significant milestones.

Commenting on the promotion, Rob Keenan, president of SECO Tools and ISA board chair, stated, “Brendan has demonstrated an outstanding level of leadership and proficiency … Read the rest

Announcing MANA Networking Breakfast October 9 Near O’Hare Airport

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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

Has a Principal Recently Terminated Your Agreement?

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It’s not uncommon for me to get phone calls from MANA manufacturers’ representative members who start the conversation by telling me a long-term principal they’ve worked with just notified them they were terminating the relationship.

When they tell me that, I then ask, “So, how long has the new guy been working there?” In 100 percent of these calls, the answer is, “There has been a change in management.”

If the new owners have experience with manufacturers’ representatives and understand the value manufacturers’ representatives provide, they would not have canceled the agreement. If they are new to working with manufacturers’ … Read the rest

Action vs. Reaction

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For every action there naturally is going to be a reaction, and that’s exactly what happens when a manufacturer makes an inquiry of a rep. That point was made recently when a rep asked the following: “One of my lines’ competitors tried to hire me. I declined out of loyalty to my current principal. Is it unprofessional or bad manners to share that information with my current principal?”

What’s important to keep in mind here is that reps are going to react — one way or the other — to questions of that type. Here’s some of the feedback on … Read the rest

The Hidden Value of Social Media

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Organic social media marketing can be a flashy/shiny object to companies. Brands start tossing time/money/resources into it, almost hoping that something positive will happen from all that effort.

We call that the “post and pray” method.

Or they barrel into organic social media, thinking it should be approached like any other direct response channel.

We call that generally a bad idea.

Examples of things I’ve heard company decision makers say (any of these sound familiar?):

  • We’ve got to be on TikTok; it’s exploding right now!
  • Social media feels like a marketing tax we have to pay — it doesn’t do
… Read the rest

Follow a Moral Compass — Five Years and Three Million Dollars

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“A man’s got to have a code, a creed to live by no matter his job.” — John Wayne

The concept of a moral compass is something I have given a lot of thought to over the years. Living my life by my moral compass is something I strive to do every day. Living by a moral compass to me means that a person has principles and values and tries to consistently conform his or her behavior to those principles and values. Primarily to me, this means being honest.

One of the things I have learned over the 40-plus years … Read the rest

Industrial Supply Association Announces 2023 Fall Summit: The Channel’s Best Professional Development Event

Registration is now open for the Industrial Supply Association’s (ISA) highly anticipated Fall Summit, the channel’s premier professional development experience. Taking place from October 18-20, 2023 in Orlando, Florida, this year’s Fall Summit offers attendees tailored agendas with three tracks: Women in Industry, Emerging Leaders, and Channel Pros. Packed with engaging sessions, interactive breakouts, and exciting networking activities, the Fall Summit is designed to captivate and empower professionals, unlocking their full potential for career growth.

“Professional development is the lifeblood of growth in any industry, and this sector is no exception. ISA’s Fall Summit is precisely what our industry needs … Read the rest

What If MANA Didn’t Exist?

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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!

A Shrinking World Is an Opportunity to Expand the Rep’s Line Card — Part 2

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This is a two-part editorial solely focused on the subject of representing principals from overseas.

In Part 1 of this editorial, we covered some of the soft skills associated with working with overseas companies such as holiday schedules, language and U.S. geography. In this month’s editorial, we cover some of the “harder skills” that the rep must take into account. I have narrowed this down to my top three. These include contracts, shipping terms, and harmonized tariff codes.

1. Contracts/Agreements

At the best of times, contract negotiations can be tedious, time-consuming and potentially expensive if the contract has to go … Read the rest

Motivating the Network

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When a manufacturer with a history of working with a network of independent reps asked an audience of reps how he could best motivate some of his reps who he claimed were underperforming, there was no shortage of responses.

Kicking it off, one rep asked in return, how do you gauge that they are in fact underperforming?

After posing the question, the rep continued: “No doubt, there are some people who are underperforming. However, as I consider many of the reps I personally know, reps are driven to make as much money as possible. If they can’t make that with … Read the rest

Improve Your Company’s Effectiveness on LinkedIn

LinkedIn is a resource hub. It’s a place where people post updates, share company news, professionals seek jobs, pitch potential customers, and members chat and connect. Learn how to improve the effectiveness of your company’s LinkedIn page with these eight tips.

1. Improve the design of the company page

On social media, visuals are everything. If you don’t grab viewers’ attention right away, they won’t bother reading the content. Short and engaging videos are powerful, while strong and unique images can reinforce the message you are trying to communicate. Be sure to select photos on target with your business and … Read the rest

Another Approach to Managing Procurement

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In an article that appeared in Agency Sales magazine within the last year, the author encouraged salespeople to work around and avoid the procurement department to consummate the sale.

I wanted to offer a different perspective on how working with the buyer can avoid delays in purchasing and payment, and even help close the sale faster.

For 20 years, I have presented contracts training to both procurement (purchasing) and sales departments of companies in various industries around the country. As a result, I’ve become familiar with companies’ purchasing and sales processes and policies. I’ve also been privy to both sales’ … Read the rest