They pay for their own office, computer, car and health insurance. Reps have contacts in the field and can often get product placement because they know the buyers and have previously worked with them. They know who might buy your products and, hopefully, have relationships with these buyers. Reps get you noticed in the marketplace, and you get to leverage off their existing relationships. Reps are professional sales people who, at least in theory, are well trained.
Reps can cover a wide geographic area much more economically than an in-house sales force.
That's because they represent a number of manufacturers so their expenses are, in effect, spread over multiple vendors and not borne by just one, as is the case when a manufacturer has its own sales force. Your commissions go to cover just part of a rep's expenses and overhead. The manufacturer can get a sales force into the field more quickly and economically with sales reps than if hiring and training its own sales organization. This is especially important for a new company wanting to get off the ground. Balthasar, who with his wife owns Nirvana Candles near Santa Cruz, California, uses 13 independent sales organizations that collectively cover enough markets to represent 90 percent of the buying power of the United States.