Manufacturers' representative

A manufacturers' representative (rep), also known as independent sales representatives or sales agent, is an individual, sales agency or company that sells a manufacturer's products to wholesale and retail customers.

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, 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. It can be anything from 1% to 50%, although a more typical commission rate would be 10% to 25% for low-cost or consumer products and 5% to 10% for high cost or industrial products.

An international manufacturers' representative may be responsible for, in addition to sales solicitation, handling inventory, dealing with tariffs, and complying with government regulations.

A manufacturer representative is the most widely used type of agent. These types of reps are typically used in the following situations:

Manufacturer representatives generally represent more than one manufacturer. One of the reasons they can represent more than one manufacturer is the products are related or complementary, but not competing. These reps will know their market and products well since they typically work in a specific industry and geographic area. Manufacturer's reps know the market well because they attend conferences, conventions and trade shows in order to maintain knowledge of new products and developments in their industry. Many of these reps sell more technical or scientific products which requires a high level of product knowledge.

Companies seeking manufacturers' representatives often use the directories of manufacturers' representative associations. Many of these associations are vertical, or industry-specific, and one, the Manufacturers' Agents National Association is a horizontal, industry-independent association.

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