Manufacturers' representative

A manufacturers' representatives (rep), also known as sales agent, is an individual, sales agency or company that sells a manufacturer's products to wholesale and retail customers.^[1]

When a manufacturer hires a manufacturers rep firm, this usually means that a contract is signed between the two companies, which empower the rep to sell the manufacturer's products as an agent in a defined territory.^[2][3] The products are usually ordered directly from the manufacturer, who then pays a sales commission to the manufacturers rep firm. The commission rate varies according to the market and the product type. It can be anything from 1% to 50%, although a more typical commission rate would be 10% to 25%.

An international manufacturers' representative is responsible for handling inventory, dealing with tariffs, and complying with government regulations.^{[citation needed]}

When do you use a Manufacturer's Rep?

A manufacturer representative is the most widely used type of agent. These types of reps are typically used in the following situations;

• When there is lack of a sales force for the manufacturer. The manufacturer's rep will then do all of the selling.

• When introducing a new product into the market.

• When there is a new market the company wants to enter, but the market is not fully developed for their own sales force to be used.

• When it is more cost-effective than using the company’s sales reps. The sales potential may not justify the cost of using the company’s sales force.

Generally they represent more than one manufacturer. One of the reasons they can represent more than one manufacturer is the products are related or complementary, but not competing. These reps will know their market and products well since they typically work in a specific geographic area. With them using a specific area, they may already have prospects in mind that they have formed previous relationships with. Manufacturer's reps know the market well because they attend conferences, conventions, or even trade shows in order to keep up on new products and developments. Many of these reps sell more technical or scientific products which requires a high level of product knowledge. ^{[4] [5]}

References

1. ^ Sales Representatives, Wholesale and Manufacturing
2. ^ Typical Manufacturers' Rep USA Territory Descriptions
3. ^ Typical Manufacturers' Rep USA Territory Map
4. ^ "Sales Representatives, Wholesale and Manufacturing." Occupational Outlook Handbook, 2010-11 Edition. U.S. Bureau of Labor Statistics, n.d. Web. 10 Jul 2011. <http://www.bls.gov/oco/ocos119.htm>.
5. ^ Spiro, Rosann L., Gregory A. Rich, and William J. Stanton. Management of a Sales Force. 12. New York, NY: McGraw-Hill/Irwin, 2008. 108-109. Print.