Larry Lowe is a principal of CHEM-TECH International, Inc., a company that specializes in the sale of environmentally-
safe chemical cleaners and equipment for many cleaning applications (computers, electronics, aviation, etc.), especially well-suited for overhaul and repair facilities. All of CHEM-TECH's products contain no CFCs and are made with the safest possible ingredients.
Larry can be reached by phone at 703-549-1001 or by e-mail at chemtech@
idsonline.com
You can also visit CHEM-TECH International's
Web site
for more information.
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Selling with Manufacturers' Representatives
by Larry LowePrincipal, CHEM-TECH International, Inc.
As with other decisions in the business world, the type of sales force to employ is not always easy. One way is to use manufacturers' representatives. Although not for every business, at CHEM-TECH International, we decided this was the best way for us to go. Our primary reason for selecting this method was cost to get the sales force established. However, there are other reasons for selecting this option.
Another advantage of this type of sales force is the presence of the salesperson in the territory, which generally makes follow up face-to-face calls less costly and more effective. In addition, since representatives have other product lines, leads for one line might generate sales in another. In fact this latter characteristic is a key element of the selection process and a central factor in forming an effective relationship.
In order for manufacturers' representatives (also called manufacturers' agents) to be successful, there must be a complementary product mix. This provides economies of assets in making sales calls or other sales activities. Of course, this is a possible disadvantage as well since other products are competing for the time available to sell. Although all agents like to have product lines that generate high volume sales and thus a solid income, placing too much emphasis on one product line carries high risk as well. If one product line accounts for too much income, loss of the line can create extreme hardships. Accordingly, successful sales representatives usually have income from several line. The number of lines or items sold depend upon the industry, technical expertise required to sell a specific product, etc.
Naturally, good representatives are responsive to principals, but this sometimes leads to conflicts that are difficult, especially when the manufacturer is accustomed to a dedicated sales force. Of course, the dedicated salesperson can generally be expected to be more responsive than an agent. However, since the representative's income depends entirely on sales commissions, failure to meet the principal's expectations is sure to result in loss of the product line.
For our particular business, the best representative from a product line prospective is one that sells to companies engaged in manufacturing or repair operations that require some type of cleaning. Since we sell chemical cleaners and equipment which uses chemicals to clean, this seems perfectly logical, and at first glance, one might think finding such a representative is fairly simple. Not so.
Difficulty arises from several directions. Finding an agency in the right territory with the right product line is not easy, but some of the other less definable factors in the relationship between product provider and seller are even more substantial. Not surprisingly, one of the most important is measuring the capability to sell your particular product. Naturally, your agent will not successfully sell for you unless the proper tools are in place. Some of these must be provided by the agent, but others should be, or perhaps can only be furnished by the manufacturer.
Of course, a good sales person must know the product well in order to sell it. By necessity, that knowledge must come from the producer. Furthermore, material such as brochures, testimonials, samples, etc., must also be provided by the manufacturer. Additionally, representatives need information on recent sales, particularly to new customers in businesses that are unlike those of current customers. Advertising, trade shows, etc. which produce sales leads are generally the responsibility of the manufacturer as well.
Unless the agent has confidence in your products, sales will not take place, or the pace will be slow. In our business, we try to develop this confidence by doing demonstrations in the field with potential customers early in the relationship. The representative must also have confidence that your products will be desirable in the market he works, customer service will be prompt and appropriate to the circumstances, and commissions will be paid on time. The importance of paying on time cannot be over stated, since agents work partially or completely on commission. No sales means no income, is understood by all representatives, but not paying commissions promptly is sure to sour a relationship.
From the manufacturer's perspective, perhaps the most frustrating aspect of this type of sales force is the difficulty in communicating with the agent. Representatives who do not pay attention to this facet of the relationship, will rarely be successful. If properly managed, with the right product line mix, a successful and mutually rewarding relationship can be developed and maintained. It might not work for every type of product, but for many it can work quite well.
Copyright © 1999 Larry Lowe
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