Experience selling through manufacturers' representatives?

November 06, 2019

by a searcher from Carnegie Mellon University - Tepper School of Business in Boston, MA, USA

I am going to be operating a manufacturing business that primarily sells through manufacturers' reps (independent sales agents). These are reps that maintain relationships with the buyers in a particular region and represent a complementary set of products that they may need.

I'm looking for best practices on managing a network like this, how to select the best reps, etc. Is anyone operating in that environment and available to give some advice?

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Reply by an investor
from Hobart and William Smith Colleges in Dorset, VT, USA

1/3 will be good, 1/3 mediocre and 1/3 worthless - if you're lucky. I've seen that hold across many industries. Ride them hard, get rid of the non-performers, try to find scrappy independents. Large groups with a big geography will also have the 1/3 splits but you can't fire the bad ones in the group and keep the good, which is why chopping up a territory with more scrappy independents is often best. Also they will usually lie and tell you they have far less lines (mfgrs) than they actually do, so you don't see how diluted their efforts are. Thier business model often runs counter to the Mfgs. Spend lots of time in the field with them so you can see for yourself. Good luck

Reply by a searcher
from Southern Methodist University in Dallas, TX, USA

Hi Nathan, yes, I have full-time sales (W2), inside sales and part time sales (i.e. mfg reps###-###-#### Generally if they are opening new accounts they are worth every penny, if they are simply servicing existing accounts than you should fire them and hire a customer success expert or applications engineer who is 100% dedicated to your product line. Sometimes they forget that their value is in the introductions they can make for you...because they carry multiple lines. If they are not brining in RFQ’s from new and unknown accounts than you need to look for a replacement. The trend today is definitely toward inside sales.

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