Manufacturers’ representatives (manufacturers’ agents) - American business
Manufacturers’ representatives (also called manufacturers’ reps or manufacturers’ agents) are independent sales people who work for a number of manufacturers of related by not competing PRODUCTs
. Manufacturers’ reps are paid on a commission basis for the sales they generate. They are typically given a specific territory or represent manufacturers to relatively small firms in an industry, while the manufacturers’ sales representatives (company employees) sell to large customers. Because they operate independently, manufacturers’ reps do not report directly to marketing managers and usually do not oversee delivery, credit, or other financial aspects of a sales transaction. Manufacturers’ reps offer the advantage of no overhead, since they are INDEPENDENT CONTRACTORS
; their disadvantage lies in less control and less loyalty to a specific manufacturer. Unlike selling agents, who have authority over pricing and promotional expenditures and may contract for worldwide selling rights, manufacturers’ representatives have little control over these marketing decisions. In addition to their function of calling on small businesses, manufacturers’ reps also create a low-risk method for firms to expand internationally. While the use of selling agents is declining because manufacturers want greater control over marketing efforts, the use of manufacturers’ reps is expanding in the United States.