An independent sales representative is the same as a manufacturer’s rep. The term “manufacturer’s rep” is essentially an older version of the term dating from the time when manufacturers were a much larger portion of the marketplace. The term “independent sales rep” has broader application as it applies to sales reps who represent many kinds of wholesale companies and not just manufacturers.
What does an independent sales representative do?
Independent sales representatives bring manufacturers’ products or support services to their established buyer network and marketing territory. An independent rep’s knowledge of and experience in the territory is an invaluable asset to companies needing fast market penetration.
Companies profit faster by entering new markets quickly, efficiently and effectively—particularly important in a volatile industry like electronics. While one branch of the industry is maturing, standardizing, and turning to more routine distribution methods, a new segment of the industry is coming to life, seeking a sales organization with technical knowledge and marketing savvy to create a need for its products.
Sales representatives are an immediately available sales force for manufacturers and distributors looking to get their products to market, quickly and effectively. Because representatives sell a number of lines in a territory to well-known customers, they provide a more reliable source for market intelligence. Their customers feel confident in discussing changes and opportunities in the marketplace with them, as well as airing criticisms, praise and suggestions they would be reluctant to share with factory personnel.
Commission-only sales representatives are a highly motivated sales force since they operate their businesses on commissions only. Their motivation is understandably higher than that of in-house sales rep that derive most of their income from a set wage, regardless of their sales volume. Bonus or commission incentives usually only make up a small percentage of their income.
Do outside sales representatives add cost to the product price?
No, outside independent sales reps can save businesses money because in many instances they may be the low-cost alternative to factory inside sales force that is compensated with more than just a commission.
An independent representative is a tried-and-true way to outsource the sales function. Just as many companies are outsourcing their manufacturing and accounting, sales representatives are an outsourcing of the marketing and sales department. Manufacturers’ representatives are simply a substitute for a direct sales force; nothing more, nothing less—and all manufacturers must have a sales force.
A true channel intermediary, like a dealer or distributor, takes title to a product, marks up the price and resells it as a service. The service, which may well be an added value, is worth “x” and does add cost to the product. However, the manufacturers’ representative does not mark up the price and is usually factored into the cost of sales at a lower cost than in-house labor.
Can independent sales representatives serve as distributors?
The industry currently defines distribution as a manufacturer’s product channel to the end user. The independent sales rep is not part of the channel, such as a distributor, unless the sales representative takes title of the products and resells to the customer. While this may occasionally be dictated by some manufacturers and in some countries, usually sales representatives market in the way the manufacturer dictates usually without acting as a distributor.
With years of experience, RepHunter allows fast-growing companies to quickly expand their market penetration by providing them the most suitable independent sales reps. Through its unique matching process, RepHunter enables companies to build their sales force with top quality independent sales representatives.
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