The Rep Connection

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An introduction to MANA's steps to rep professionalism

Entrepreneurial Harvard Business School students often use outsourcing as a tool when they launch new ventures. To explain how the selling function can be outsourced, Harvard Business School invited Manufacturers' Agents National Association (MANA) CEO and President Charles Cohon to speak to its MBA students on how to find, recruit, contract with, and work successfully with independent manufacturers' representatives. Special thanks to: Jodi Gernon, Director, Arthur Rock Center for Entrepreneurship at Harvard Business School, for putting her team on the task of making this event a success, Catherine Cronin, Staff Assistant, Rock Center for Entrepreneurship, Harvard Business School, for her tenacious attention to detail throughout the process, Bob Reiss, Harvard MBA and retired super-rep, for relentlessly encouraging his alma mater to introduce its students to the concept of manufacturers' representatives and for sharing his expertise during the Q&A section of this presentation, and; Dr. Ben Shapiro, Harvard Malcolm P. McNair Professor of Marketing, Emeritus, for joining us and for sharing with our group the advantages of a sales force that is a variable cost instead of a fixed cost.

Years ago, your principal signed a rep agreement with you that protected your commission earnings, so you invested time and hard work to grow that line. Now your principal wants you to sign a new rep agreement. What should you do? In this podcast attorney Randy Gillary shares his recommendations on how to evaluate a principal's proposal to re-write your rep agreement. Principals don't re-write rep agreements because they feel the rep's interests were not sufficiently protected, says Gillary, they do it because they want to reduce the commissions they pay or to terminate the rep without paying post-termination commissions the rep had earned under the terms of the original contract. It's a not-uncommon complaint from reps who call Gillary's firm for legal representation, and Gillary's program to address this situation is fascinating listening for any rep. Interestingly, notes Gillary, of all the principals he's had to pursue on this type of matter, none have ever been a MANA manufacturer member.

Sometimes a new owner makes things better for reps. More often, a new owner eventually challenges legacy reps to prove their value, or even fires all its reps to save on commissions. Whether the outcome is positive or not positive, the news that your largest principal is always jarring, and the first thing that comes to reps' minds when that news breaks is "What do I do now?" In this podcast, attorney Thomas J. Kammerait of the law firm von Briesen & Roper, s.c. discusses the rights reps retain and the perils reps face when one of their principals undergoes a change of control.

The year was 1947. Harry S Truman was president, the World Series was televised for the first time (the New York Yankees beat the Brooklyn Dodgers in seven games), Chuck Yeager broke the sound barrier, and on October 17, 1947, the Manufacturers' Agents National Association joined the community of not-for-profit trade associations. Fast forward to July 1949, and MANA members discovered the first, 24-page issue of The Agent and Representative magazine (eventually renamed Agency Sales) in their mailboxes. Digging through the first few issues of The Agent and Representative reveals how much MANA has changed, and also how much it has remained the same. In those first few issues we find sentences like: "I know it's customary for men to call themselves and believe themselves to be 'practical men' to pooh-pooh anything savoring of academic classification in salesmanship." No thought of women as salespeople or as customers in those earliest editions. But in today's MANA, woman-owned firms are common and the first woman to join MANA's Board of Directors does so in May 2017. Another glaring change since 1949 is that, although manufacturers were invited to advertise in our magazine, the articles in that 1949 issue focus solely on the needs of manufacturers' representatives. Today Agency Sales strives to be relevant to both manufacturers and manufacturers' representatives and includes articles for both audiences. And, also for the first time, a manufacturer will join MANA's Board of Directors in May 2017. Those are things that have changed, and changed for the better. Yet, some articles from those early issues could be reprinted today and most readers would have no hint that they were written in 1949. In the very first issue of The Agent and Representative is the story of Bill Herendon, a manufacturers' representative whose customers pressured his principals to fire Bill and cut the price by the amount of Bill's commissions. And how Bill, lacking a written agreement, had no recourse when the principal's new sales manager agreed to that customer's request.

Business networking groups bring together business owners from a wide range of businesses. A veterinarian, a real estate agent, and a restauranteur could be part of the same networking group, with their only common interest being the desire to bring their business problems to a fresh set of eyes. But what if you could assemble a group who had deep, detailed knowledge of your business and industry instead of choosing your group from random industries? And at about half the cost of joining a business networking group. For manufacturers that sell through manufacturers' representatives, that industry-specific group is easy to assemble. Just bring together a half dozen of your best representatives to serve on your representative council. In this podcast, MANA CEO and President Charles Cohon discusses the reasons representatives councils are so productive and touches on resources manufacturers can tap to launch their own rep councils.

Last year Mexico imported approximately $182 million from U.S. companies. One of the ways U.S. companies can pursue their own slice of that $182 million pie is through manufacturers' representatives in Mexico. In this podcast MexicoRepresentation.com President Ed Juline describes how U.S. manufacturers can engage with Mexican manufacturers' representatives and clears up some of the misconceptions U.S. manufactures have about best practices in dealing with customers in Mexico.

I've heard of manufacturers' representatives going to court and being awarded past due commission on a million-dollar order. I've even heard of manufacturers' representative s going to court and being awarded a million-dollar commission. But this is the first time I've heard of a manufacturers' representative going to court and being awarded a $76,877,889.41 commission judgement. In this podcast manufacturers' representative Don Hanes and his attorney Anthony Santucci discuss the events that brought them to United State District Court where Hanes was awarded a $76,877,889.41 judgement against his Chinese principal, and the path ahead toward collection that judgement in Chinese courts. Read the judgement at https://www.leagle.com/decision/In%20FDCO%2020160606698/Senah,%20Inc.%20v.%20XI'AN%20Forstar%20S&T%20Co.,%20Ltd.

Sales force outsourcing is booming in Europe, says Christian Rebernig, Secretary General of the Internationally United Commercial Agents and Brokers (www.iucab.com). Known commonly in Europe as commercial agents rather than manufacturers' representative or manufacturers' agents, companies that provide European sales representation to worldwide manufacturers enjoy productive political and economic climates, says Christian. IUCAB is an umbrella organization of European and other worldwide country representative associations, and maintains a list of country associations where manufacturers seeking reps can launch a search. IUCAB also maintains a searchable database of North American MANA member representative firms that international manufacturers can search to outsource their North American sales activities at http://www.commercialagents-northamerica.com/index.html. Christian shares insights that let North American manufacturers' representatives know that they have more in common with their international commercial agent counterparts that they might have expected, and let manufacturers know that there is a robust international network of outsourced sales force firms is available to take their products to new markets and customers they never would have reached any other way.

Some people can't bring themselves to visit a dentist. Others struggle to get themselves into their accountant's office at tax time. And for many, fear of the unknown keeps them from reaching out to a lawyer whose specialty is manufacturers' representative law. In this episode attorney Matthew Benson discusses the kind of conversation he and most MANA-associated attorneys have with MANA members before the clock on hourly billing starts to run, for example: What are my legal rights? How much will this cost? How do you evaluate my case? How long will this take? What disruptions may be incurred in my business? With Matthew's insights, we discover that launching a new relationship with a lawyer who specializes in rep law involves minimal cost and absolutely no Novocain.

It's more than making sure the T's are crossed and the I's are dotted. A good rep/principal agreement requires strategic thinking before the first clause is even written. In this episode attorney Daniel Beederman reviews the strategy underlying the creation of a successful rep/principal agreement.

What's it like to be a rep or work with reps in Canada? It's the same as it would be in the United States, but it's also different. In this podcast we speak with Canadian rep Craig Lindsay, President of Pacesetter Sales & Associates, who share the misconceptions and misunderstandings manufacturers and reps have about how reps operate in Canada. Among the challenges Craig's firm has mastered is servicing a mostly long and narrow sales territory, some 2,800 miles long but just 100 miles deep. That's because most of Canada's commerce occurs within about 100 miles of its border with the United States, although Craig's salespeople do cover the entire country. Craig brings 25 years of experience in his own firm, eight years of experience on MANA's Board of Directors, and a commonsense perspective on international commerce to this interview.