memcon · Uncategorized

Understanding the Rep/Principal Relationship

Contrary to what Principals want to believe, Manufacturers’ representatives are independent contractors, they do not function under the immediate supervision of the manufacturers they sell for; therefore the relationship is not like that between a boss and employee, but is a business-to-business/business partner relationship with each of them. As such, the manufacturers can’t have the same type of direct control as they do over their own personnel. For this as well as for other practical reasons, it is crucial for manufacturers to fully support their relationships with their representatives if the endeavor is to prove worth the effort of contracting with an agency in the first place.

Probably the most important drawback for using Reps is the lack of control. Reps are independent contractors doing business for more than one manufacturer. Because of this, no one manufacturer gets full-time attention from the agent, as he or she must split time among various principals. Manufacturers seeking to take advantage of a rep firm’s services only for the perceived cost-savings are destined to maintain antagonistic feelings towards their Reps, changing contracts and Rep firms and ultimately create morale issues in the sales force.

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Phil Heft – Sales Specialist – pheft@hotmail.com

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