When Chris Balthasar and Grace Gamboo started their candle-making business in the summer of 1998, they needed to distribute their products throughout much of the country quickly. Tim O'Connor, owner of Pacific Espresso, which makes espresso equipment and a product to clean espresso machines, also needed to get his products into stores far and wide, including overseas. He, too, could not afford a sales force and realized how difficult it is for an unknown company to break into a market. For many smaller operations, using sales reps makes the most economic sense.
Reps are independent contractors who are generally paid by commission only when sales are made.
They may be self-employed, but frequently are employees of a sales rep marketing company. These firms have anywhere from a few reps on staff to dozens. The Manufacturers' Representatives Educational Research Foundation, a trade organization based in Geneva, Illinois, says the typical rep handles 12 to 14 lines, although this can vary depending on the industry. Reps do not, however, buy products and then resell them- that is the job of distributors. Reps function as middlemen who promote a manufacturer's products to companies or retailers and, when successful, receive a commission paid by the manufacturer.