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Leather Briefcase

WHAT ARE THE ADVANTAGES OF USING A REP FIRM?

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Lower Direct and Indirect Costs.
The table to the right shows a thorough comparison of the costs associated with maintaining a sales staff as compared to using a rep firm.

Simplified Planning and Budgeting.
With fixed commissions on sales as the only cost associated with sales, it is much easier to predict overall
costs.

Seasoned, Knowledgeable and Connected.
Rep firms have experienced and well trained staff and there is immediate access to an expanded customer base through the rep firms existing relationships. Understanding of and experience in the overall industry with knowledge of the local territory adds context and allows reps to discover new opportunities that a sales staff may overlook.

Lower Administrative and Management Costs.
Maintaining a sales staff can be a drain on vital company resources in ways that are difficult to measure; a rep firm eliminates these as well as trainingand turnover costs.

Motivated Representation.
The rep firm and their associates are motivated to work consistently and persistently to grow sales since their personal success depends on moving products and being effective.

Marketing Flexibility.
Using a rep firm allows manufacturers to quickly launch marketing initiatives and in many cases reps can increase volume by developing customers in new channels that would be costly to reach.

Comissions (only)

None

None

None

Cost Comparison – Sales Staff or Representation

COMPANY SALESPERSON

MANUFACTURERS’ REP

Costs Before Any Sales are Completed

Salary

Medical Insurance

Employment Taxes

Retainers

Sales Staff Training

Supervision and review

Workers Compensation

Insurance

None
None
None
None
None
None
None
None

Costs Associated with Sales

MANUFACTURERS’ REP

Commissions

Expenses

Bonuses

Incentives

COMPANY SALESPERSON

None
None
None
None
None
None

MANUFACTURERS’ REP

Pension

Retirement

Vacation Time

Sick Time

Flex Time

Family Leave/Sabbatical

COMPANY SALESPERSON

Ongoing Costs Not Directly Related to Sales

A diverse group of products that appeal to
a large customer base with deep relationships throughout the industry.

MANUFACTURERS’ REP

A single line with limited contact

outside of current
customers; developing customer relationships is costly.

COMPANY SALESPERSON

Connection to Customers

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