Definition: An independent sales agent who works on commission
Manufacturer's representative or rep, manufacturer's broker and
manufacturer's agent are all terms used to describe independent
sales agents who work on commission. You don't pay them a salary,
just a percentage of what they sell. Manufacturer's reps offer a
practical, cost-effective alternative to a direct sales force for
many growing companies. There are more than half a million reps in
North America, most selling to targeted markets in select
geographic regions. Reps know their markets well because they call
on local buyers regularly and have established sound working
relationships with them.
Using manufacturer's reps can provide you with many of the
benefits of having a satellite office in the location--including
knowledge of local markets and rapid access to large
accounts--without your incurring large fixed costs. With reps,
sales costs are always a fixed percentage of sales. The downside is
that reps typically handle many different products. Some may be
complementary to yours; others may compete. A typical
manufacturer's rep earns a 5-percent commission on sales, although
that amount varies widely depending on the product, market and
sales volume.
If you're interested in learning more about manufacturer's reps,
contact the Manufacturers' Agents National Association.