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. It took slightly more than a year to attain this level of market penetration, which would have been impossible with a direct sales force.
Sales reps have their own reputations.
If your rep has a good one, that helps you in the marketplace. Reps are your eyes and ears in the marketplace. They will tell you about competitors' products, relate customer complaints and even provide insights into the market that might convince you to change your strategy. Mike Penna knows both sides of the manufacturer-representative relationship. He owns Fishbliss Sales, a sales rep organization in Aptos, California, and has an ownership interest in Mermaid Soaps, which manufactures soaps sold via sales reps.