Manufacturers Representative

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Manufacturers representatives (reps), also known as sales agents, are independently owned and managed sales companies that are an alternative to hiring a direct sales force. Sales agencies have gained in popularity in recent years as the cost of hiring and maintaining direct sales forces has increased.

When a manufacturer hires a manufacturers rep firm, this usually means that a contract is signed between the two companies, which empower the rep to sell the manufacturer's products as an agent. The products are usually ordered directly from the manufacturer, who then pays a sales commission to the manufacturers rep firm. This is the only expense that the manufacturer has. As such, using a manufacturers rep is a popular way to expand a sales organization, since there are no up-front costs. Alternatively, the costs of hiring direct employees can be much higher since compensation not only includes commissions but wages and benefits.

The commission rate varies according to the market and the product type. It can be anything from 1% to 50%, although a more typical commission rate would be 10% to 25%.

There are resources on the Internet catering to the needs of independent sales reps who are seeking new lines to represent, and to manufacturers who are seeking independent sales representation. Two prominent examples are RepHunter and RepLocate. Also Manufacturers' Agents National Associationis the association that caters to Reps and Manufacturers alike

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