Manufacturers’ Representatives- Should You Hire?

Manufacturers' Representatives
Manufacturers’ Representatives

We are going to discuss about who manufacturers’ Representatives are. Advantages and disadvantages of working with them. What a business should expect from them and where to look for them.

In present scenario, not all businesses can afford to pay a regular salaried personnel. Startups and small businesses may find it particularly difficult to hire a full time sales rep. Apart from salary, businesses may have to fulfill employee related overheads. Overheads such as insurance, travel expenses, taxes etc may come expensive. This may discourage a business owner. As a result of this, businesses are increasingly turning to hire commission based sales reps. These are Manufacturers’ Representatives. They take no salary but only commission.

Manufacturers’ Representatives work for all types of companies. From smaller companies to big billion dollar business houses. All come under purview. Few of these business houses even sell exclusively through Manufacturers’ Representatives.

Almost any kind of product that can be manufactured, can be sold through Manufacturers’ Representatives. These include products ranging from fashion and textiles to automobiles, from pin to huge machines and so on.

The engagement between the principal (hiring company) and manufacturers’ representatives operates strictly under set contractual terms.

Manufacturer’s Representatives may be a blessing to a business if managed and run properly. But there few disadvantages also associated with them which we are going to discuss below.

Reasons to hire Manufacturers’ Representatives-

No overhead strings attached with Manufacturers’ Representatives

First and foremost reason for a business to hire Manufacturer’s Representative is there is no employee overheads associated with hiring. Rep gets paid an agreed upon commission if he sells products/services. If he is not selling anything, he gets nothing. This benefit encourages companies to run an entire team consisting of Manufacturers’ Representatives. They may easily be engaged to represent a product line for different locations and territories.

Manufacturers’ Representatives may help penetrate new market and test new product

Manufacturer’s Representatives may prove to be a pretty good option to understand and test new market and see if a product has any potential to sell. A business may hire a representative and see how the product performs in the target territory. Quite often manufacturers’ representatives carry several similar but non competing lines of different companies and may guide the principal companies about market scenario and right strategy to market those products.

Beneficial to Exporters & Startup Companies

As startup companies mostly remain in fragile condition, selling a product through manufacturers’ representative may be a wise decision. Later on when the sale picks up, those companies may hire full time reps. Further, exporters staying abroad may find this a good option to enter new foreign market.

Governed by Contractual Terms

Relationship between companies and manufacturers’ representatives works strictly as per agreed contractual terms. This allows flexibility in relationship to operate and perform. That is to say, parties may set commission structure, territory, rewards, marketing support assistance as per mutual discussion and operate within set sphere.

Presence of big Manufacturers’ Representative firms

A manufacturers’ representative may operate solo or may be in group. They may even form as a company. There may be a large number of sales reps operating in different territories under a rep firm. Big rep firms may provide significant insight about the marketing strategies to new companies. A hiring company gains instant access to industry expertise and knowledge of a particular country or region. This type of knowledge could take a company years to develop on its own, and it could be very expensive. Contracting with a rep bypasses those negatives. For example, they can comment on the competition, type of advertisement that should be done, estimated potential of a product in the market and likewise.

Disadvantages of hiring Manufacturers’ Representatives-

Lack of control

Hiring companies (Principal) may find is difficult to have control over Manufacturer’s Representatives. It is important to understand that the relationship is not of an employer – employee but more of a partnership. It is a business to business relationship. A principal cannot simply direct Manufacturers’ Representatives to do everything as per according to his wish.

Not suitable for specialized technical products

While there are Manufacturers’ Representatives who are pretty qualified to deal with skilled specialized products and services, there are large number of many of them who are not. For such products and services involving specific technicalities, it is better to not to go for Manufacturers’ Representative. For such kind of products or services, hiring a skilled full time representative is a better option. But again, it depends on the qualification and expertise of Manufacturers’ Representative. For instance, if he is already selling similar products then that may be accepted.

After Sales Service

Most Manufacturers’ Representatives hesitate and do not provide service after sale of products. It is because they are usually concerned with making commission with sale and are reluctant in providing services. If a rep is ready to provide after sales service then that should also prove to be beneficial to him.

Where to find Manufacturers’ Representatives

Considering above, now the question comes as to how to where to find these sales people. There are a few places where you may look for Manufacturers’ Representatives-

  1. Specialized websites meant for Manufacturers’ Representatives – Websites such as CommissionPeople.Com may be a good option. It Allows hiring companies to post opportunity details by charging a prescribed fee (Click to see pricing). As Manufacturers’ Representatives prefer to work with financially sound companies, it is a better way to pay to hire Manufacturer’s Representatives instead of opting for free listings such as on linkedin, facebook etc. Paid listing may give significantly good impression about the company as compared to opting for free. Also, the website offers full recruitment service for hiring companies (Click to know about Recruitment Service).
  2. Linkedin– Businesses preferring to list free opportunity may look for Manufacturers’ Reps through linkedin group specifically meant for Manufacturer’s Representatives such as this.
  3. Facebook– Facebook may also be a good place to search for these reps. Facebook pages such as this may be useful.