Disadvantages of Using Manufacturer Reps
While there are a number of advantages to working with manufacturer
reps, there are also a few disadvantages.
Multiple Product Lines
Manufacturer reps may represent from as little as one product line
or as many as thirty. There is no set limit for the number of product
lines a rep can represent. It is natural that you would want to
know where your product stands with a rep in regards to the other
product lines they represent. Will your product be the rep's primary
focus or does the rep already have other products that are a priority
for them?
Generally, manufacturer reps will not represent another company
that makes the same product and competes with you. However, there
are some instances where this can happen. For example, the rep may
have some customers that insist on buying products from a different
company. In this case, the rep will lose the customer if he does
not represent your competitor's product.
It is also possible that for some reason, a competitor's product
may simply fit or work better than yours within a customer's specific
application. Rather than risking unreliable service, the rep may
opt to sell a competitor's product in order to maintain a solid
relationship with the customer. Representing competing lines does
not happen frequently and you should check with your rep for a list
of product lines they represent.
When representing numerous product lines, though, it is inevitable
that companies will offer different promotions or price breaks to
the end customer or to their rep. For example, a manufacturer that
sells golf balls to retail sporting good stores may offer their
rep an additional 5% commission on all sales during the month of
December. Therefore, your rep may be focused on other product lines
during different times of the year. It is up to you to keep your
product or service fresh in the mind of your reps so they they do
not overlook you.
Communicating with Reps
Since manufacturer reps cover regional territories where your company
is not located, it is naturally more difficult to stay in contact
with long distance reps than it is with an in-house sales employee.
To avoid potential pitfalls, you need to establish a regular schedule
for communication. Whether it is once per week, once per month,
once per quarter, etc. is up to you.
Communication is the key to a variety of issues. You need to know
how to reach your rep on short notice in case an urgent issue arises
with a customer. You need to know when they are available or when
they may take time off.
If your rep covers a larger sales territory, such as the Northeast
United States, you will need to know when the rep is planning trips
to specific areas like Maine or Vermont so that you can plan customer
presentations, visits and other scheduled events accordingly.
Lack of Expertise with Your Specific Product
If a manufacturer rep is representing a product like yours for
the first time, you may be concerned about their expertise with
it and their ability to present it clearly and accurately to potential
customers. If you have a highly technical product, you may choose
to have your rep only locate potential customers and schedule appointments
with them, while handling the product presentation yourself. Alternatively,
you may choose to give product presentations with your rep initially
until you feel they are knowledgeable enough to handle it themselves.
For other products, an initial training may be sufficient. However,
if your product continues to develop and change or time, you may
need to provide ongoing training to your rep to insure your rep
is aware of and thoroughly understands your latest updates.
|