Reps – The Bad

Bad Rep!This will most likely be a short post.  I don’t have much bad to say about reps in general.  As with all things in life, there are some bad people out there who happen to work as a rep.  But don’t let that color your judgement on all reps.

The main bad thing said about reps is that they cost money.  Well, Duh.  Of course they do.  And I’m glad they do.

Since reps work on a commission of actual sales, they are a variable cost in the business.  When your company is small and just starting out, that variable cost is small.  Being small, it helps your company grow faster and less expensive.

The problem seems to come when companies have success and grow to many millions of dollars of revenue in a reps account – then the variable cost becomes a larger dollar amount.  And that tends to draw the attention of financial types back at HQ.

So, I put the cost of reps down here as a bad thing only because I have seen too many times where that variable cost, while a small percentage number, can add up rather large dollar amounts…

A second and less talked about potential bad side of using a rep is lack of bandwidth.  Since reps are paid on sales, and they are human, attention and effort tends to go towards the companies that are selling, growing, and show long-term potential.  When you are starting out, you may get great attention and feedback from your rep and you may think of them as your new best friend.   However, if the initial meetings with the retailer don’t go perfect and roadblocks are put up, you may find that your new best friend doesn’t call back quite as quickly any more.

This is where a good account manager or director of sales can really extend the leverage of rep force in the field.  It is their job to stay on top of and continue to motivate the rep, even while the company or product is in a development phase.

Keeping mindshare of a rep force is one of the largest battles that most start up manufacturers have to face.  However, if the manufacturer is making quick progress at knocking down the objections of the retailer and is basically doing the things that they should be doing, then they will naturally create momentum that will keep the rep and all interested parties engaged and positive.

Overall, I am a fan of using reps and the ideas discussed above do not detract from my stance.

Anyone out there who doesn’t like using reps, or wants to add any thoughts to the ‘bad’ side of reps?

Reps – The Good

Independent reps have been a part of the selling model for many years – they are an established practice that can add many benefits, however, there is a cost involved.

In this post, I’ll review some of the good and great aspects of using reps – and in the next post, I’ll look at some of the negative aspects.

Independent reps are local sales people who represent your product company to a local account or set of accounts.  They work for multiple product or service companies selling into the same accounts.  Rep firms can be smaller, boutique husband-wife teams, or they can be very large firms.  Quality varies based on the people, not the size of the company.

Reps Save Time…

When starting a company up, or first trying to get business going with a retailer, reps are a huge time and effort saver.  They stay connected to the whole retailer buying staff and have ongoing business relationships with many different categories’ buyers.  They also manage several layers above the buyers – as well as sideways into other departments such as inventory re-buyers, returns departments, and others.

When a company is just starting out, a good rep can cut months off of the time to get a meeting with the right buyer.  Then can prep you with insider-type information such as what categories or keywords are currently hot at that retailer, so you can work that info into your presentation.  Reps provide valuable feedback with their access to the buyer, assistant buyers and the staff in general.  They can often provide ‘quiet’ feedback to let the factory know what the thoughts are about a product or presentation, sometimes feedback that would never make it to the factory without the reps.

Reps Connect…

Retail buyers are very time constrained:  Meetings, emails, phone calls, etc.  can make it very hard to connect with them.  Having a rep in the local market can make the information exchange with your buyer much easier.  Most good reps are selling multiple companies products to the same buyers – so they have meetings with those buyers constantly – many days they will have multiple meetings in the same day with the same buyer.

Reps Manage Workload…

Even after your company is successful with one or more buyers and categories at a retailer, the rep continues to add value in other ways.  Some rep firms have assistants that work hand in hand with the inventory buyers to help alleviate product outages and handle the intricate details of tracking inventory all the way through the system.  They can also bring buyers, GM’s, and VP’s from other categories or divisions if necessary, into meetings or thought process’s.

Other benefits?

These are just some of the benefits of contracting with independent reps.  There are many more – Comment below with any others.

The Meeting

Selling face to face – the one hour meeting that can change your quarter or year. That’s pressure – and that is what I love. I like to look at it as an hour of opportunity and prepare for the meeting with a positive attitude and high expectations.

The Meeting

Being a National Account Manager (NAM) for a consumer electronics company is a great job – lot’s of freedom to make your own hours, usually you can work out of a home office, and you can see your results on the shelf when you do a store visit… NAM’s are usually well paid, with a decent salary and potential to earn quarterly bonus checks that are quite nice when you come in over quota!

But, make no mistake, the hours will be long, you will learn to dread airplanes, and you do have to learn to work with many different kinds of people. The buyers you interact with at the retailers move to new jobs fairly frequently, so it’s tough to establish and maintain strong relationships.

There is ‘paperwork’ involved, including forecasting units sold, reporting on sell-through, tracking inventory, managing the marketing funds (Co-Op and MDF) planning ads, and other account management activities. You either learn to love MS Excel, or your flounder in this amount of data – and I love my MS Excel!

The Sales aspect of the job is what brought me back time and time again. I love the meetings with buyers – not meetings in general mind you! I love planning them, doing my homework for them, the travel to them (I even love the security check in procedure at the front desks!!! – weird, I know!) But, most of all, I love my 45-60 minutes that the buyer commits to me and my company, our products and plans. If you have a great meeting, you can add products to the shelf and can plan on incremental revenue for the next year or so. I love that kind of leverage!!!!