Category Archives: Department

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

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

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

Rep Search Reinvented

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

Market Development Fees

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

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

Academic Awareness

Two common complaints from reps are:

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

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

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

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

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

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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

Has Selling Changed? Will the Latest Tech and Approaches Help?

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When I started my sales training business, I used to speak to some sales groups for free. Two days before one of those speeches I got an email from the sales manager saying that the salespeople wanted to spend the time in their next sales meeting learning how to use a new software program vs. listening to a speaker. She said the new software program promised to double, triple, or even quadruple their current sales. I had a similar experience while cold calling when a sales manager told me that he was holding off on sales training because they had … Read the rest

Common Traits of a Successful Sales Representative (and a Good Lawyer) and How to Develop Them

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The substance of this article could possibly be better placed under one of the other departments of Agency Sales, but because I’m a lawyer with approximately four decades of experience representing sales representatives, I’ve come across some insights that I wanted to share, so it appears here under the department of “Legally Speaking.” There are good and bad lawyers and there are good and bad sales representatives. The good professionals have many common traits, and I’ve learned from experience ways of developing some of these (I didn’t learn them in law school).

A good lawyer, like a good sales … Read the rest

WCM Industries, Inc.’s Steve Woodford Honored With 2022 AIM/R Golden Eagle Award

Steve Woodford, president of WCM Industries, was honored with the 2022 Golden Eagle award by the Association of Independent Manufacturers’ (AIM/R) membership during a gala celebration at the rep association’s 50th Annual Conference at the Gaylord Rockies Resort in Aurora, Colorado on Friday, October 14.

Woodford accepted his honor at the biggest event of the year for AIM/R, which took place in his organization’s backyard. WCM Industries, Inc., is based in Colorado Springs, Colorado. Each year, AIM/R membership nominates individuals from manufacturing for the Golden Eagle award. These individuals are often executives who embody all the core values of supporting … Read the rest

Letter to the Editor

I had a rather “lively” conversation with the sales manager and the president of a prominent industrial manufacturer/contractor in my area. I asked the president (who I’ve known for years) if he’d like representation in the area I served. We agreed to have a meeting. His sales manger scowled at me for most of the meeting, until I asked him if there was a problem and was he even high on the idea of my firm repping them. That’s when the truth came out.

He claimed he’s been through using reps like me before — “They go in, open the … Read the rest

“I Need Help to Get Paid”

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

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

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

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

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

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

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

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

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

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

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

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

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

Choosing an Automated Email‑Marketing Platform

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Edited by Stephanie Bray

Maybe it’s “third time lucky,” but this editorial, I knew what we were going to write about. Possibly because back in 2020, we told you: “Next up? Evaluating the automated email-marketing platform that directly integrates with our new CRM to streamline our efforts.” Well, we not only evaluated it — we committed to it!

Any manufacturers’ rep worth their salt knows that keeping in touch with customers and prospects is critical. Things change all the time, and if you don’t stay on their radar, you miss opportunities when those changes happen. But how in the world … Read the rest

All A’s on This Report Card

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A manufacturer recently offered what he viewed as a report card that evaluated his company’s performance in the marketplace once they had made the move from a direct to an independent manufacturers’ representative sales network.

Here’s how he described his company’s experience: “From the very beginning the combination of all of our reps’ talents clearly became evident. Their in-depth knowledge of the territory, local contacts and relationships coupled with their flexibility in the field immediately improved our market performance.”

He continued, “Then there’s the issue of synergy. The agencies we chose to go to market with had line cards that … Read the rest

Key Contract Terms to Strengthen Rep Agreements

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Based on our significant experience reviewing and managing commission claims with manufacturers’ representative (rep) agreements with their suppliers, the author thought it might be helpful to go through a summary of these provisions and provide some helpful perspectives and best practices.

“Rep Theory”

The value of a manufacturers’ rep is fundamentally tied into relationships they have with customers and with suppliers (principals). It has been said that the assets of an agency “go home at night,” which is a reference to the intangible nature of their relationships. The rep functions as a drummer, facilitator, expediter and solicitor. As a general … Read the rest

MAC October Meeting Report

MANA CEO and President Charles Cohon and Attorney Daniel Beederman, partner in Chicago law firm Schoenberg Finkel Beederman Bell Glazer LLC, packed the house at the October meeting of the Manufacturers’ Agents of Cincinnati (MAC). Speaking on “Getting Paid for Your Success” and “Putting the Succession in Succession Planning,” Cohon and Beederman explored how having a good rep agreement can increase the likelihood that you will be paid for the success of your efforts and key points about selling or buying a rep agency.

For information on future MAC meetings visit their website at www.maccincinnati.org.… Read the rest

75th MANAversary

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

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

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

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

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

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

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

How We Communicate With Each Other Has Changed

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I owned and operated a manufacturers’ representative business back in the last decade of the last century. How I communicated with my principals (and vice-versa) differs from the communication options available today. Back then we used landline phones, fax machines and the U.S. Postal Service. Manufacturers’ representatives were asked to fill out “call reports.” Needless to say, more options exist today, such as emails, texts, virtual meetings, social media, and online CRM reports. Life is definitely more complicated.

One thing has not changed and that is the need for good, open communication between manufacturers’ representatives and manufacturers. Manufacturers and manufacturers’ … Read the rest

The Secret to Getting Attention

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There’s an ever-present concern that presents itself to manufacturers’ reps when they are seeking the attention of principals looking for representation: “What do I have to do to show a manufacturer that I’m the right one for him?”

Here’s how one manufacturer addresses that concern:

  • “Here’s the first thing I consider: Do I even know he’s there? What has the rep done to establish his brand in the territory? How long have they been in business? Do they communicate what other lines they represent?”
  • “Has the agency been a presence at important trade shows that I attend? Have they ever
… Read the rest

How Can I Determine the Financial Strength of My Insurance Company?

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How do you compare life insurance companies? What features do you examine? What criteria do you use? How do you know what to look for? Making sure that your insurance company is financially sound is an important part of helping to ensure family security.

Fortunately, there are a number of independent companies that make these evaluations. These rating companies carefully examine each insurance company in the areas of profitability, debt, liquidity, and other factors. From the results of these examinations, they then issue overall ratings.

Looking up a company’s rating will provide you with a snapshot of that company’s financial … Read the rest

Live! In-Person! Finally!

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

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

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

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

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

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

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

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

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

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

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

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

What Makes a Great Principal?

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I recently saw the movie Elvis, the story about the rise and fall of Elvis Presley. There is a man in the movie by the name of Tom Parker (“The Colonel”), played by Tom Hanks. The Colonel latched on to Elvis because he could see early on how talented he was. The Colonel, of course, had ulterior motives for connecting with Elvis, but I won’t tell you what those were in case you want to see the movie yourself. The Colonel took 50 percent of all the money that Elvis made. Needless to say, he “used Elvis.” As I … Read the rest

Looking for “Reinvention”

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The president of an electrical products company recently emphasized how important it was for his fellow manufacturers to be on the lookout for rep firms that have reinvented themselves.

According to the executive, the kind of rep that he looks to go to market with is one that operates in a lean and efficient manner. “The pressure for cost reductions in our marketplaces will certainly not subside. As a result, we’ve got to challenge everything we’ve always done. Once you do that you’ll be surprised at what you can do without.”

In the course of challenging everything you do, he … Read the rest

How Signing a Sales Representative Agreement Is Like Buying a House

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Imagine you are buying a house. Let’s say it costs $400,000, so you put down 20 percent and get a mortgage for the rest. You renovate the kitchen. House prices go up. Three years after you bought the house, it is easily worth more than $500,000.

Would you buy the house and renovate the kitchen if the seller could take back the house on 30 days’ notice? Of course not. For most readers, this question will seem rhetorical.

Now imagine you take on a new line. You train your sales force on the products and spend time introducing them to … Read the rest

You Can’t Sell From an Empty Wagon

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

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

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

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

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

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

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

How to Successfully Sell Through Independent Reps

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Selling through independent manufacturers’ representatives can be a very rewarding business partnership if a few key areas are taken into consideration.

The first step is for the manufacturer to understand the rep-principal model. MANA can serve as a great resource for those manufacturers who have never gone to market using reps. Insight into a rep’s role of selling in a defined geographical region, handling synergistic but non-competing lines and adding value through applications engineering assistance are just a few areas of responsibility in which MANA can serve to educate.

Next, it is important to find the right partner. MANA has … Read the rest

The Question of Exclusivity

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When a MANA member described an issue they encountered when negotiating an agreement with a prospective principal, she got plenty of feedback from her rep peers.

According to the rep, “The principal in question does not want to define a territory and they want to work on an ‘account-by-account’ basis. They are not offering any exclusivity; they demand the agency be exclusive to them. They have yet to offer a defined reason other than it ‘is not in their culture to offer exclusivity and it’s something they haven’t done in the past.’ They have even hinted that it is illegal … Read the rest

Tracking Your Production Is Key

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Even if you are thoughtful and deliberate when setting your goals, if you’re like most sales professionals, you don’t accomplish all of them. There are a number of reasons why you might fall short, but one of the most common ones I see is a lack of goal tracking.

Tracking is the magic ingredient that makes goal setting so powerful.

If you write your sales goals and put them in a binder that sits on the top shelf of a little-used cabinet, you are wasting a golden opportunity. Check your sales goals at least once a quarter, preferably once a … Read the rest

Minnesota Legislature Strengthens Termination of Sales Representative Act

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Unpaid commissions will be easier to collect for Minnesota manufacturers’ representatives. The Minnesota legislature recently passed, and Governor Tim Walz signed into law, a significant amendment to Minn. Stat. §325E.37, otherwise known as the Minnesota Termination of Sales Representative Act (“MTSRA”). The amendment passed with bi-partisan support and makes it easier for sales representatives, as defined under the MTSRA, to enforce a claim for wrongful termination and unpaid commissions.

The 2022 amendment to the MTSRA prevents an out-of-state principal from requiring a Minnesota sales representative to seek compensation for a violation under the MTSRA, and unpaid commissions, in another state. … Read the rest

ISA Announces New Board of Directors 2022-2023

The Industrial Supply Association (ISA) has announced the new Board of Directors effective July 1, 2022.

ISA’s Board of Directors is a dynamic group of elected volunteer leaders dedicated to anticipating and serving the needs of ISA’s member companies (distributors, manufacturers, and independent manufacturers’ representatives). Directors contribute knowledge, time and experience. They are responsible for the development of ISA’s strategic direction while overseeing a series of initiatives focused on the advancement of the industry and ISA.

“I am thrilled to announce David Ruggles as chair of ISA’s Board of Directors and welcome three new directors joining our board,” said Brendan … Read the rest

What Will Happen If There Are No Sales?

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

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

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

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

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

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

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

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

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

How Manufacturers’ Representatives Interact With Customers Has Changed

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There is no doubt that how salespeople interact with customers differs now than just a few years ago. Not just due to the COVID‑19 pandemic — it changed even before that. Technology and younger generation customers with different values impacted salesperson/customer relationships. Meeting with customers in‑person became a greater challenge.

Obviously, to remain successful in the new environment, you must adapt and make changes. Here are some thoughts to help guide you to the new “New.”

First, believe that we live in an abundant world and we have choices. Are all your principals collaborating with you as “Partners in Profits” … Read the rest

The Other Side of Communication

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There have been innumerable articles in this publication and others concerning the communication that manufacturers should expect from their reps. There’s another side to this subject, however. When several reps were asked what they truly value in the types of communication that they receive from their principals, here were some of their reactions.

“While most of our principals are fairly small, putting out a regularly scheduled newsletter would obviously be a major undertaking for them. What they do, however, is to religiously let us know anything and everything important that’s happening with them that can impact our work in the … Read the rest