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WHAT ARE THE ADVANTAGES OF USING A REP FIRM?
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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