by John Beaver, GSA Optimum
Management likes to use the word “merged.”
This scenario has played out for me several times, and I’m pleased to say I’ve benefited more than I’ve lost — the key is being proactive. Yes, sometimes you will lose; it’s just the way the cards play out. Rather than simply giving up, I suggest you come up with a strategy and work the plan.
First, the assessment: did the merged company use manufacturers’ representatives or, worse yet, a direct sales force? If it’s a direct sales force, you may want to consider visiting the management team to discuss the advantages of the rep model vs. the cost of a direct sales force.
The newly merged company’s management may consist of some old friends and surely members of the new entity, who may or may not know the advantages of an outsourced sales force. Don’t assume the new management team would not welcome a presentation on the advantages of an outsourced professional sales force. In some cases, the old management is just hoping to hold onto their jobs and may go with the flow just to save their own skins. Reps need to plead their own case before termination letters are sent out — by then, it’s too late. If possible, do the presentation in person and perhaps with a few of your fellow reps. MANA can assist with reference material.
Another option you shouldn’t overlook is to offer to hire the direct salespeople in your area. The additional business from the merged company may be enough to cover the additional cost and it’s an excellent way to expand your sales force, maybe even get an experienced salesperson who can hit the road running.
Simultaneously, and quietly, I like to see what lines are available in the market. Please keep in mind that I’m not advocating going after another representative’s line. You should check to see if a similar line has a direct sale force or perhaps doesn’t have an outside sales force. Should an ideal replacement line be represented by a fellow rep, consider merging or presenting a buyout plan.
If the markets are dissimilar products being sold to different markets, perhaps the newly merged company may stay with a two-rep model. It’s been my experience that this doesn’t hold true. Sooner or later they will have what I refer to as a “repoff.”
Typically, when a larger company purchases a much smaller company, they stay with the rep firm of the larger company. If I happen to represent the smaller company I usually, but not always, count my days. However, this is not always true. In one particular case, a very small line I represented was purchased by a tier 1 company and after the “repoff,” we were appointed the rep for both lines.
I always like to research the firm I’m against. I see nothing wrong with this. Before the big game, smart teams watch the game films of their opponent.
It’s important to know your competition. What are their strengths for my principals’ market vs. my strengths? Are they bigger or smaller? What lines do they carry? How synergistic are their lines to the new entity? Do they have a line that competes with the new entity? In some cases, but not always it could be game over and you win by default.
Regardless of whether your manufacturer was acquired or did the acquiring and regardless of whether they had a rep or direct salesforce, if your firm is known as a professional rep firm that gets the job done and books new business on a regular basis, you should out come out on top. As I like to say, water seeks its own level.
John Beaver founded GSA Optimum, Oakdale, New York, in 1984. The metropolitan New York/New Jersey independent manufacturers’ representative firm has 33 employees covering Maine to Virginia out of its four offices. The agency specializes in electrical mechanical, electronic, and electrical components. This growth can be partly attributed to his successful acquisition of six firms. In 2015 he began his tenure as a MANA Board member. He is also an active member of ERA and NEMRA. As a member of ERA he serves as a National Delegate and is the Chairperson of Metro NY/NJ ERA local chapter.