MANA includes a significant number of benefits with your membership. Each month we highlight a benefit that could help improve how you find and partner with your manufacturers’ representative network.
How do you create agreements with manufacturers’ representatives that work well for both of you?
As you near the conclusion of your interview process with a prospective manufacturers’ representative, the next step is to negotiate an agreement for both of you to sign. In the past, sometimes manufacturers and manufacturers’ representatives would work on a handshake deal, but those days are long gone.
The main thing to consider is that the agreement needs to work for both of you. If you get your corporate council (who has little knowledge of what a manufacturers’ representative business is) to write an agreement, the odds are pretty good that they will provide a document that does a great job of protecting you, but not do much to protect the manufacturers’ representative. None of the professional manufacturers’ representatives that could perform well for you will sign it.
We recommend you access the MANA’s Manual for the Creation of a Rep-Principal Agreement Special Report you will find in step 3, “Create Fair and Balanced Written Agreements” of the “Steps to Selling Through Independent Reps” program in the member area of the MANA website. Look for it in the “Professional Development Resources” section.
This document provides the background and rationale for the clauses in the agreement as well as three sample agreements at the back of the manual. One is for manufacturers’ representatives who sell to OEM customers, another is for those who sell to resellers (wholesalers, distributors, retailers) and the third one is for those who sell to end-users. You can copy and paste the appropriate one into a Word document and fill in the required information. You can also edit the agreement to cover unique aspects of your relationship with the individual manufacturers’ representatives.
One of the items to be negotiated in the agreement is the commission percentage the manufacturers’ representative earns on orders they create for you. To help with this, in step 3, “Create Fair and Balanced Written Agreements,” you will also find the results of a survey MANA conducted on commission rates.
Finally, if you make changes to the sample agreement, you should run them by an attorney to make sure the wording you used matches the legal language attorneys use. MANA provides a list of “Rep-Savvy Attorneys” in the “Legal and Consulting” section in the member area of the website.