Manufacturer’s representatives are independent, self-employed sales reps who sell the products and services of numerous companies that manufacture physical products.
These straight B2B commission sales professionals are commonly called Manufacturer’s representatives or independent sales representatives and work strictly on a commission-only basis.
These sales professionals are highly experienced in selling and have spent many years as employees before deciding to branch out and start their own sales agency. Their agency might consist of one rep (a solo rep agency) or more.
Most importantly, they shouldn’t be confused with unemployed people who are desperate to find work and are willing to forgo a salary.
Finding Manufacturer Sales Reps
To find manufacturer’s sales reps, you first need to know where to look; traditionally, it’s a complex and time-consuming task given the fragmented nature of the industry.
As a result, manufacturer reps would - in the past - contact companies they were interested in working with directly or rely on word-of-mouth recommendations from other reps they know.
However, due to the shift in the way we now work and advances in technology and social connection, most now search for new manufacturer sales rep opportunities and manage their product lines by using dedicated online sales recruitment and management platforms like CommissionCrowd.
What is the difference between a manufacturer’s rep and a distributor?
You may have heard the terms ‘manufacturer’s rep’ and ‘distributor’ in the world of manufacturing. So, what’s the difference?
A manufacturer’s rep is a self-employed salesperson who sells on behalf of a company that manufactures physical goods. They then sell to distributors or directly to retail or wholesale outlets as part of their sales efforts.
Distributors, on the other hand, are the middlemen and women between manufacturers and retailers. They buy from manufacturers in bulk, then resell those products to retail stores at a higher price. Unlike manufacturer’s reps, distributors will physically purchase stock and store in their own premises while also taking care of shipping, etc.
Manufacturer’s Reps Build Diverse Portfolios
A manufacturers representative typically builds a portfolio of products that make up their greater ‘line card’, meaning they’ll generally work with more than one manufacturer at any time. Rarely will a rep work exclusively with one company which would limit their earning potential.
More than one independent sales agent can band together to form an entity known as a manufacturers rep firm which has the benefit of building even larger portfolios, giving the increased ability to up and cross-sell within their networks.
The fact that reps sell on behalf of multiple manufacturers simultaneously is a huge advantage to companies. It means that the manufacturer’s products will have far greater exposure in the marketplace when sold alongside non-competing goods and services.
These sales reps are also a great cost-effective alternative to hiring in-house salespeople who may or may not perform but still command a salary.
Manufacturers also benefit from an independent sales rep when they want to test their products in a new market, making it far more cost-effective than hiring new employees in uncharted territories.
There are more than half a million reps in North America alone, with most selling to targeted markets in their selected geographic regions. Reps know their markets well because they typically have years of experience calling on local buyers and have established a significant foothold within their region.
Working with manufacturer’s reps can provide you with many of the benefits of having a satellite office in the locations your company wishes to penetrate, without incurring high fixed costs of being physically located there and operating with an employed sales team.
How Are Manufacturer’s Reps Usually Paid?
Manufacturer’s reps are usually paid on a commission-only basis which consists of a percentage of the value of the products they sell. There is no set formula for how much this percentage will be, and it can vary from company to company depending on the margins.
While not set in stone, the commission rate that reps command can typically range between 6% and 20%.
Before working with new companies, a sales representative agreement will be agreed and signed by both parties which outlines the terms of this new working partnership. Commissions and other aspects will always be negotiated and agreed on prior to work commencing.
Sales Reps Are Responsible For Their Own Expenses
It’s important to remember that the salesperson or rep firm is essentially running and managing their own business and are responsible for their own operational costs.
This means all of the traditional expenses that come with hiring in-house sales employees are eliminated, presenting massive savings to manufacturers.
When hiring employees here are some of the upfront costs that are not incurred when working with freelance sales reps:
- Employee benefits
- Taxes and tax contributions
- Company cars
- Travel expenses
- Technology (cell phones, laptops etc)
- Office equipment/space
- Holiday / sick pay / other paid leave
On average a commission-only B2B sales agent saves around £65,200 ($90,100) per employee as part of a direct sales force.
Are Manufacturer’s Reps Paid Too Much?
First and foremost, the most important thing to remember is that sales agents are self-employed and incur their own expenses while prospecting for new business. They also only earn their commissions after a new sale has been made.
They are also responsible for every other expense traditionally associated to running and managing a business. Thus, there is also a greater risk to them without the safety net of a regular salary, which is why they generally command a higher commission than employees.
Frustrations may occur from time to time which may initially arise from a rep earning more than the sales manager who originally hired them.
However, good salespeople, especially those with existing networks, can sell a vast amount of new product quickly and across regions where the company has no presence.
However, since their commissions are directly correlated to their sales, their rewards can not be achieved without growing the companies they work with.
Why do companies use manufacturer’s representatives?
There are many reasons why companies opt to partner with Manufacturer reps. Here are just a few examples:
- A manufacturer’s rep works on a commission-only basis. They are only paid after closing new sales. This presents a significant saving on overheads for the manufacturer they represent.
- Experienced reps and rep firms usually have large existing sales networks and can open doors to new customers across multiple industries quickly.
- A manufacturer testing out a new territory, new product or market can gain a foothold in a geographic area exceptionally quickly when using an outside, independent sales force with existing knowledge and connections in those regions.
- Manufacturer’s reps also take an active role in marketing and promotion of the products they sell within the regions they operate in.
How to attract Manufacturer’s Reps to your sales opportunity
When starting your recruitment drive, it’s imperative to remember that you’re going to be up against competitors also vying to work with the best independent agents. So, how can you ensure that your sales job opportunity stands out and attracts the best B2B sales pros?
The first thing is understanding how these professionals operate and what they expect from a company moving forward. Remember, you are not hiring employees, so in order to sell your opportunity to them, you need to know what’s important to them.
We’ve also written on this topic in-depth in this article: 10 Things To Understand When Working With Independent Sales Reps
CommissionCrowd surveyed many self-employed sales agents, asking them what the most important factors they consider before becoming interested in an opportunity. You’ll note interestingly that ‘potential earnings’ was not top of the list.
Here are those results in order of importance:
- Honesty & Integrity
- Management Attitude
- Potential Earnings
- Attitude Towards Self-Employed Sales Reps
- Company Marketing Efforts & Samples Provided
- Payment Terms
- Customer Service
How do manufacturers’ reps achieve more sales?
The beautiful thing about working with experienced B2B sales agents is that they rarely need hand-holding. Given that they’ve already progressed to the highest level in their sales career and have decided to forgo the safety net of a regular sales job, they have all of the tools at their disposal to achieve more sales.
Here are a few of the ways representatives achieve higher total sales than their employed counterparts.
- Multi-line selling: By building diverse portfolios of products and services and representing several different companies that complement their manufacturer’s products, they regularly call on more prospects and have a broader customer base than regular employed salespeople. Multi-line selling achieves deeper market penetration and increased sales within the market.
- Representatives can hit the ground running and get up to speed much faster than employees. While they still may need to learn about their new products, they tend to choose to work with companies they know fit with their existing clients and networks.
- Representatives and sales agencies tend to have an established marketing network, prior knowledge of the territories they operate in and know the needs of their prospects.
- Representatives move quickly and have the ability to enter new markets more efficiently than their employed counterparts.
- Rep firms also have experience in marketing, meaning that they can take on a new product and build awareness effectively before selling begins.
- Not being paid a salary and selling on a commission-only basis means that motivation is much higher than employees. Selling in volume is their path to success.
Connect With High Quality Manufacturer Reps Today
Are you looking for a fast and easy way to build a high-performing B2B sales team?
CommissionCrowd is the world’s fastest-growing manufacturer representative network that allows you to find, connect, train, manage and even pay your reps their commissions directly.
We’re not just another CRM or SFA software company. Our product is designed specifically for manufacturers who need help building and managing their sales teams.
Join CommissionCrowd and instantly connect with reps in any location around the world. Managing your team has never been easier!