Manufacturers Representatives National Resource Center
What Is a Manufacturers' Rep? And What Does a
Manufacturers' Representative Do...And NOT Do?

A Manufacturers'
Rep Is an
Independent
Salesperson Who
Works on
Straight
Commission.


If your business has not used manufacturers’ representatives to sell your products and services, here is a quick overview of what they do.

Independent Sales Force: A rep usually represents from as few as five or six to as many as 15 or 20 businesses. The businesses (or “principals”) they represent are generally non-competing suppliers to the same industries. For example, a rep might represent several manufacturers of parts and components for the computer, electronics and telecommunications industries. Reps define their businesses along three dimensions:
• The Products and Services They
Sell
• The Industries They Call On
• The Geographic Area They Cover

Straight Commission: A manufacturers’ rep traditionally earns a commission on paid invoices of net sales from his territory. Reps pay their own expenses, and receive a 1099 from each principal. The commission rate varies from industry to industry, and even from product to product. Some principals offer incentives, such as paying a higher commission on sales to new accounts.

Different Levels of Support: Some reps offer a very high level of support, while others just locate hot prospects. For example, some reps are graduate engineers who get directly involved in speccing out their customer’s needs. Others are generalists who find prospective business, then turn the technical details over to a support person from their principal.

From 1 to 20 or More People: There are many one-man rep firms, but many others have grown to as large as 20 or more. Larger firms have both field salespeople and an inside sales/order entry/customer service/technical support staff.

One to Several States: One rep firm typically covers one to three states depending on population and business density. One rep may cover just Southern California, yet another might cover all of the Mountain States. It will take 10 to 20 rep firms to cover the entire US, and two or three more to cover Canada.

Reporting Procedures: As a self-employed salesperson, a rep does not submit sales reports as an employee-salesperson would. It is customary, however, to ask reps to report on their follow-up activities on leads supplied by a principal from trade shows, advertising or their website.