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

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

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

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

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

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

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

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

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

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

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

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

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

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

— Line Card Profitability Analysis Workbook

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

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

Objective analysis includes asking questions like:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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