Negotiating Fees for Missionary Work

by Jerry Leth, Vice-President and General Manager, MANA

I periodically receive phone calls from MANA manufacturer members telling me a prospective manufacturers’ representative requested a fee to take on their line. “I thought reps work on a commission basis only, what’s this about?” they ask.

If the manufacturer has little or no business in the territory, it takes more time to develop the business. And, time equals money. While customers trust the rep you want and buy from him or her, they also trust and buy from other salespeople who call on them. The manufacturers’ rep with the missionary line has to work really hard to replace the competitor. That is easier said than done.

For many years, when manufacturers asked prospective reps to take on missionary lines, the reps indicated no interest. In the not-so-distant past, someone (possibly a manufacturer) figured out that to get good reps to take on their line, they had to compensate the reps to cover the extra effort and cost to develop the missionary line. This compensation creates a win-win solution to a long-existing problem. Now, manufacturers can sign up good manufacturers’ reps to take on missionary lines. By the way, the fee paid to manufacturers’ reps for doing this is typically significantly less than the cost of hiring direct salesperson.

Can the manufacturer sign up a manufacturers’ rep willing to take on the missionary line without a development fee? Of course! The question I would ask is, how much time would this rep be willing to spend on the missionary line? Will they not devote more time to working the lines that create income than on a line that might do this? For sure they would, so look at the development fee (which is paid for a limited time only) as an investment. That investment brings a large return over time.

MANA manufacturer members can learn more about developing new markets with professional manufacturers’ reps by accessing the educational material on this topic found in the MANA member area of the website. Login and click on the blue button, “Steps to Becoming a Quality Principal.” Step 8 contains the educational material that covers developing new markets with professional field sales reps.

Principals who partner with their reps by supporting them in missionary efforts achieve “emotional favorite” status with their reps. When you achieve emotional favorite status with your reps, they spend more time and effort selling your products and services than their other less favorite principals.

Jerry Leth, MANA’s vice-president and general manager, started as membership manager in August 2000. Previously, Jerry owned and operated Letco Tech Sales, Inc., a MANA member, multi-line professional outsourced sales agency he founded in 1989. Before starting his own agency, he managed a network of manufacturers’ reps as vice-president of sales and marketing for torque and tension equipment. Jerry graduated from Stanford with a mechanical engineering degree. He started his career at Hills Brothers Coffee in San Francisco in engineering and production before embarking on a sales career.