What is a Manufacturers' Representative?
A manufacturers’ representative is an individual sales agency or company that sells a manufacturer’s products to wholesale and retail customers. In its basic form, a manufacturers’ representative is any individual who agrees to represent a company and sell their product or services on a straight percentage fee.
How Market Representation Works:
When a manufacturers’ rep is hired, a contract is signed between the two companies. This contract empowers the rep to sell, or solicit sales for, the manufacturer’s products as an agent in a defined territory. The products are usually ordered directly from the manufacturer, who then pays a sales commission to the manufacturers rep firm. The commission rate varies according to the market and the product type. Commission rates typically range anywhere from 1%-50% depending on the type of products being sold.
Benefits of using a Marketing Reprentative:
Sales solicitation, handling inventory, dealing with tariffs, and complying with government regulations are some general aspects manufacturers’ rep can advance. Manufacturers’ representatives may be especially helpful for small businesses, startup companies, and also exporters. People who are willing to test new product or enter new market can benefit from a manufacturers’ representative. Hiring Manufacturers’ Representatives may be an easier alternative to full time sales reps, no employee overheads need to be given such as insurance and taxes.