Manufacturer Rep Agreements

5 mars 2022 - 7 minutes read

Charles Cohon, CPMR, is CEO and President of MANA. In 2016, Cohon was awarded the Certified Association Executive (CAE) designation after taking courses and tests from the American Society of Association Executives (ASAE). Cohon also earned an MBA with honors and a focus on strategic management and entrepreneurship from the University of Chicago`s Booth School of Business and was the founder and owner of a very successful manufacturing dealership in Illinois for nearly 30 years before joining MANA. Manufacturer Camille Perrin* used the MANA manufacturer`s representation agreement as a basis for creating a win-win agreement with the representatives she recruited to sell her company`s security systems such as closed-circuit television, video surveillance, access control and intercom systems, so she started with the MANA manual to create a main representation agreement included in her MANA membership. After downloading this Word document from the member area, she worked with her lawyer to tailor it to her company`s needs Do manufacturers and sales representatives need a manufacturer`s representative to formalize their relationships? It was experiments like David`s that moved the distribution agreements of handshake manufacturers to carefully crafted and balanced agreements. They are carefully designed to ensure that both parties know exactly what is expected of them and are impartial, as professional representatives who are in high demand will only sign a win-win deal.  All sales due to the main efforts of the sales representative will be taken into account for this commission. The sales order must have been registered by the manufacturer as a valid sale related to the sales representative. The manufacturer must calculate the commission due and transfer the amount to the company. The sales credit to the sales representative are the commissions invoiced by the company. A key element in building long-term relationships between sales representatives and manufacturers is a balanced win-win agreement. MANA`s guidelines for agent contracts have been drafted to help manufacturers and agents create this type of agreement.

The sales representative receives a commission for a range of products sold. The sales representative receives a commission for reserved sales and when the company derives income from the manufacturer for that sale. The commission is an additional fixed commission percentage of the manufacturer`s incoming commissions for the respective product range. This commission is paid monthly « But now, many sales managers and vice president of sales who call to recruit me seem to stay with their company for four to five years before moving on, so the details of verbal agreements are quickly lost. And sometimes the companies I`ve represented are sold to new owners who bring in a whole new management team that has no recollection of the former employees of the manufacturer`s representative`s compensation promises. Think of the experience of baby boomer representative David Reese*, who remembers the days when a handshake with a manufacturer could last a lifetime. « The person you shook hands with had been with the company for a decade, so they had gained the authority to make a deal and stick to it. And he would probably be with the company for decades to come, so you can count on him to remember his promises, » David says. David says, « I like the fact that my MANA membership includes a free 40-page policy document for manufacturer representatives. This allows me to send a potential school principal a well-designed sample for the agreement of a manufacturer representative to start our conversation. A fair and balanced agreement creates the conditions for long-term and mutually beneficial relationships between clients and representatives.

Let MANA help you put your relationships on the right track with win-win agent agreements. *Names have been changed to protect the privacy of those who share their stories with us. Details may have been added, removed, or modified to better illustrate the concepts discussed in this issue. i Any part of this document can be modified or overwritten as needed.ii Enter the start and end dates of the sales commission plan validity period. Most companies use the start and end dates of the calendar or fiscal year for these values. For some businesses, there may not be an end date.iii Sales credit may be split if two or more sales representatives are involved in a sale. The allocation can be made at a predefined or negotiated rate. Splits may also not be allowed.iv Replace with appropriate products or product families. You can also replace products with manufacturers. « In the end, the fact that my company`s agent contract was a win-win document was a great recruitment tool, » Camille said. « The sales reps I was trying to recruit took this as a signal that our company was a representative-friendly company, and we were able to recruit very powerful reps who might not have been available to us otherwise. » If another sales credit was involved in the sale, the sales credit is distributed among the sales representatives at a negotiated sharing rate. We also recommend an open dialogue on the terms of the agreement before it is signed.

If one of the parties simply signs the other party`s agreement without revising it, the chances of reaching a balanced win-win agreement are slim. The representatives she recruited were impressed by the fact that her company`s agreement was not unilateral. Some wanted to make minor adjustments, and Camille realized that because each representative company was unique and a slight adjustment to the agreement was a reasonable place to stay to make a deal with the very professional representatives she hoped to sign. .