The Manufacturers’ Agent (Rep)

Definition

A manufacturers’ agent or manufacturers’ representative is a self-employed salesperson who represents one or more manufacturers on a commission basis. A large portion of small- to medium-sized manufacturing firms in the United States depends upon independent agents to sell their products. A number of larger companies are also turning to the independent agent form of representation because it is proving to be a very cost-effective means of selling. Representatives may sell to wholesalers, retailers, government agencies, original equipment manufacturers, hospitals, schools, etc. The companies that an agent represents are called principals. A manufacturers’ agent may represent several principals who produce compatible, but not competitive, lines. For example, an agent may represent one company who manufactures skis, another who makes ski boots, and still others who make sunglasses, caps, gloves and other clothing for the skier.

Duties

Today’s manufacturers’ agents are considered highly skilled marketing professionals who call on various firms to acquaint them with the products they represent. They make regular contact with these firms, pointing out special features of their products, giving demonstrations and advising them on the technical features that will meet customers’ requirements. The manufacturers’ agent must have extensive knowledge of the companies he represents and the products he markets. Agents are also required to quote prices, credit terms, delivery dates, shipping methods and costs. They may handle one-time sales, introduce new products, keep orders for established items coming into the plant and see that their customers get the best possible service. How they perform these duties depends upon whether they sell technical products to businesses and industries or non-technical products for resale to the general public.

Technical Product Selling

Manufacturers’ agents who represent technical products usually sell merchandise that industries use in their own businesses. It may involve raw material and parts the company needs to produce the finished products it sells, or it may be machinery or electronic equipment designed to make company operations more efficient. The largest employers of sales engineers are companies that manufacture transportation equipment, fabricated metal products, electronics and heavy machinery. A single sale often represents hundreds of thousands of dollars worth of machinery, but one sale may take several months or even years to complete.

Non-Technical Product Selling

Manufacturers’ agents who represent non-technical products generally sell their merchandise to wholesalers or to big retail stores for resale to the general public. The manner in which they approach customers is determined by the type of items they sell. They spend a great deal of their time taking orders from customers for lines already established, but they continually attempt to increase the size of these orders by helping their wholesalers to sell current stock successfully.

Sales Promotion Activity

Another area in which manufacturers’ agents may earn a living is sales promotion work. These agents seldom sell a physical product; rather, they promote sales by supplying merchandising advice and services. They build goodwill by helping retailers to increase sales, since they give advice on publicity opportunities, store designs, special events, exhibits, direct mail and other advertising media.

Personal Qualifications

Sincerity, dependability, honesty and resourcefulness are essential traits for anyone entering the field of the manufacturers’ agent. Other desirable qualifications are initiative, imagination, moderate aggressiveness, enthusiasm and the ability to work without direct supervision. Agents must be able to deal with all types of people, be extremely well-groomed and have excellent oral and written communication skills.

Working Conditions

Manufacturers’ agents will work under varying conditions depending upon the products they sell. Since they are independent businesspeople, they work without supervision and are directly responsible for planning their own time. Besides making sales calls, it will be necessary for them to schedule appointments, make numerous phone calls, and do a variety of paperwork. The size of an agent’s territory may range from small to extremely large. However, all agents must do a considerable amount of traveling by automobile or airplane and may spend varying lengths of time away from home. Some agents are responsible for displaying their product lines at national and regional trade shows, as well as traveling to make sales calls on customers.

Education and Training

High school students considering a career as a manufacturers’ agent should choose courses in sales, marketing, merchandising, business and math. Those interested in selling technical products should take as many related courses as possible (e.g., chemical sales — chemistry, physics, math; industrial products — machine shop, math, physics, etc.). Although many manufacturers select only sales agents who have a college degree, especially those who produce a highly technical product, opportunities do exist for persons with little or no college background. Experience in some form of retail selling, such as department stores or door-to-door, may help qualify a person aspiring to become a manufacturers’ agent. Those planning to earn a college degree should major in either a specific technical field, if that is their interest, or in business administration for those who plan to sell non-technical products.

Earnings

Since a manufacturers’ agent is paid on a commission basis, earnings will depend on a number of factors. The type of products sold, the number of manufacturers represented, the commission structure, and the individual’s own sales ability all have an effect on the agent’s income. Therefore it is difficult to calculate an average wage. Unlike the direct salesperson, a manufacturers’ agent is an independent businessperson and is not reimbursed for such things as transportation costs, hotels, phone calls, meals, car rentals or secretarial services. Agents are also responsible for their own medical insurance, retirement plan, and for paying their own income and social security taxes.

Employment Outlook

There are over 30,000 manufacturers’ agencies in the U.S. today. The number will undoubtedly increase during the next 10 years. The factors that contribute to growth include a rise in population, a rise in the standard of living, better distribution techniques, a wider variety of products and an increase in the technical skills needed to pioneer new products. New positions are created when there is a growth in these areas. Openings also become available due to attrition as well as expansion. More and more manufacturers are making the switch from direct salaried sales forces to manufacturers’ agents because it lowers their fixed cost, since they pay agents only on the basis of goods sold.