Playthings Staff -- Casual Living, September 18, 2012
In these trying economic times everyone is trying to figure out how to grow their business, gain market share, cut cost, increase margin and so on and so on. It's no different for the independent sales representative who faces the same challenges. Gone are the days for all of us when making a living was easy, if in fact it ever was really easy. It surely was not quite the struggle it is today.
The sales rep is in a very unique and somewhat precarious position. He is first limited by geography. In most territories there has been a net loss of possibilities in the recent past. Secondly, the sales rep is dependent upon the performance of the factories that are represented.
The dilemma for the independent rep that has increased over the past few years is the changing product mix in most manufacturers' offerings. There are very few companies today that can be classified as building products out of one material, or one class of product or a single style of product. This is not the history of the outdoor business. In the early days, dealers knew which companies represented what type of product on their sales floor. As the legendary Kurt Lorig, founder of Anaheim Patio & Fireside, would say, "I want to buy my bread from the baker and my meat from the butcher." Those days are gone.
How does this affect reps? Well, just about all of us have a contract that stipulates that we cannot carry lines that are competitive with the products that a particular manufacturer produces. In most cases it's cut and dry but sometimes the lines get a little fuzzy.
Traditional extruded companies may introduce one cast chair. Wood companies will have an aluminum collection. Wrought iron companies will also go after the aluminum market share. These are all necessary moves by manufacturers, but at times it forces a sales representative to give up a line he or she has pioneered for many years. So the representative will give up that income from company B to save their relationship with company A. That is part of the reason you see so many rep changes in the recent past. Of course, the rep has a choice but it's usually a difficult one.
Sometimes when a rep gives up a line, it is picked up by another sales rep who happens to carry a much more competitive line to company A. This can introduce a new struggle for floor space.
In a perfect world, as a manufacturer adds new products, you should be able to sell more volume to make up the lost income. But as we know the world is not perfect. In a lot of cases credit restraints limit the total volume that can be done with a given manufacturer no matter how many products are offered. Very rarely does a sales representative do X volume with company A and X volume with company B and then when a change is made they do 2X with company A. So as manufactures try to increase their revenue it can sometimes have the opposite effect on their sales force.
What can be done? First, what a manufacturer is really paying for with an independent rep force is time. They expect and deserve an effort commensurate with the compensation given. There should be goals that are agreed upon each season. If a manufacturer feels he is getting a rep's best effort and goals are being met or exceeded, perhaps there should not be as much of a concern as to what else the individual is representing.
Also, manufacturers might want to consider being a little more realistic as to what constitutes "being in a category." To ask a sales person to give up a full line vendor in a category because of a few competitive offerings rarely has a positive financial impact on the sales representative.
A sliding scale of compensation dependent upon the number of lines a representative carries in his bag might do the trick. This gets back to paying for time and top of mind. With the cost of travel today manufacturers need their reps in the stores and it takes a certain level of income to do this effectively.
The bottom line is every manufacturer wants to have the best rep in any given territory. Sometimes that person is the best rep because he or she is bringing more than one A line to his or her dealers. This makes the rep super important to the dealers and all of the synergies that go along with that.
All professional sales representatives want to be important to both their factories and their dealers and do what is right. Since we are all in this together, sale representatives want their factories to be sensitive to each territory and what makes sense for everyone involved to prosper.