A manufacturers representative is an independent business that fulfills the sales, marketing and customer service tasks for manufacturing companies. Manufacturer’s reps are sales professionals with an established client base who, acting as an independent proprietor, partnership or corporation, represent related but non-competitive products or services in a well-defined and exclusive territory.
Manufacturing companies primarily compensate independent manufacturing reps as 1099 independent contractors on a commission basis for goods shipped or services billed.
Why use manufacturer’s representatives?
More than 50 percent of American manufacturers use commission only independent representatives exclusively or in conjunction with direct sales forces. In fields such as electronics, pharmaceuticals, medical, clothing, and jewelry, up to 80 percent use commission only manufacturers reps.
Through selling multiple product lines on a given sales call, both the effectiveness and the efficiency of sales are increased. Because they sell multiple lines, representatives are able to expose a manufacturer’s products to more customers than factory salespeople. Multiple-line selling creates a broader, better-defined customer base, resulting in a manufacturer rep being able to rapidly get a client deeper market penetration and increased sales.
Why do so many manufacturers use representatives?
Two major reasons: more sales, less cost.
Besides sales, what other functions does a manufacturers’ representative perform?
A manufacturers’ representative supplies valuable services such as customer service; product demonstration and training; credit reports; market research and market development information; sales analysis and new product development ideas; and updating clients on current product improvements. Additionally, in certain major markets manufacturer reps provide showroom displays.
How do manufacturer reps accrue less cost to the selling process?
The manufacturers’ representative system eliminates the manufacturer’s expenses in maintaining sales offices. From commissions, the representative maintains a staff and office operation. Representatives hire and train their own sales people. They pay their own taxes, insurance, retirement benefits, travel, entertainment, trade show and secretarial expenses.
The system establishes predictable costs of selling. Commissions are paid only after orders are shipped.
It reduces marketing costs. When they sell through representatives, manufacturers reap the benefits of extra services—all at no cost beyond the commissions—such as regional sales management and sales analysis, credit reporting, product detailing, application engineering, and promotion and merchandising. In addition, reps often provide local warehousing and stocking service, if required, at far lower cost.
With years of experience, RepHunter allows fast-growing companies to expand their market penetration by providing them the most suitable sales reps. Through its unique matching process, RepHunter enables manufacturers to build their sales force with top quality manufacturer’s representatives.
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