Manufacturer’s reps usually work exclusively.
They are hired by foreign producers and manufacturers to promote
and sell their products on the domestic market. They usually
cover a single territory, and earn commission from manufacturers. The
rep closes the order for the supplier and handles all enquiries or
negotiations regarding their territory. By agreement, some manufacturers
subsidize the representative’s expenses, and pay travel expenses if
training at their factory is required to promote their product.
Manufactures are, of course, more likely to subsidize their
representative’s expenses if the representative handles only their
products. For economic reasons, many manufacturers like to have a
representative establish a branch office or agency. The manufacturer and
the representative have a very close relationship, and the representative
is expected to do much more than a brokers or commission agent.
The advantages to hiring a representative are:
* an expert, who can handle the exports, can be available at a fraction of
the cost of employing someone full time.
* association with a similar product handled by the same representative
can lend credibility and/or prestige.
* due to the representative’s knowledge of the market, information they
gather (particularly credit information) is more valuable and reliable.
* the producer has instant access to world markets and distributors and
dealers in every country, who are interested in their products.
* the manufacturer only pays according to how well the representative
performs as the representative is paid by commission.
* the manufacturer can have representation multiple locations with very
little expense.
* Cultural and language barriers can be overcome with a careful selection
of a representative.
* the manufacturer’s representative brings with them a familiarity with
their own country and its market. To be a good manufacturer’s
representative, it is best to set up outlets in various territories by
appointing exclusive distributors, which you can do as the manufacturer’s
exclusive representative. An exclusive distributor places an initial order
upon signing an exclusive distribution agreement. Then they are required
to import a minimum amount of products per year, which guarantees that the
rep has a steady amount of business, and he does not have to continually
seek out new customers. The rep only needs one distributor per location
(country, state, region, or city) depending on the territory’s size of the
type of product. After setting up a network of distributors, a
manufacturer’s rep has to follow up orders and assist his distributors to
promote their products.