How to become a manufacturer’s representative

A manufacturer representative is an independent contractor, company or sales agent that represents a company’s product. The manufacturer signs a contractual agreement with the representatives as a product agent.

This empowers the sales agent to sell the company’s product directly to individuals, wholesalers or retailers. The major advantage is direct purchase of goods from manufacturer at factory rate.

They collect the goods and pay commission to the manufacturer. This agreement allows the representative access to huge amount of inventory.

The commission paid depends on the type of product such as consumer goods, industrial or high end products. A sales agent can represent several manufacturers and products. 
Related How to become a Sales Agent

Why do Companies Need a Manufacturer Representative?

Business is all about providing value, sales and profit. Manufacturers use sales representatives to introduce new products and penetrate new territories.

Other reasons include cost effectiveness, less staff and less overhead costs. Another major reason could be attributed to poor sales and reintroduction of a product. The manufacturer rep can also access isolated areas more effectively than manufacturers.

How to Become a Manufacturer Representative

To become a manufacturer representative first incorporate your business. Select a good business name and register as a limited liability company.

The next step is choosing a good location, secure funding and transportation. Focus on a niche, get familiar and specialize in certain products. You can approach manufacturers to secure sales contracts.

Learn the Trade

A degree in marketing would provide the academic marketing background. This will also aid your presentation and acceptance by manufacturers.

You need practical experience and a provide evidence of proficiency. Increase your knowledge through seminars, conferences, books and online resources.

Write a Business Plan

Write a manufacturer representative business plan and carry out a feasibility study. The business plan should cover product sourcing, company structure, staff and funding. Use the feasibility study to understand competitors, prices and products you wish to represent.

Permits and legalities

Register your business as a limited liability company. You need liability insurance and tax identification number.

Once you secure contractual agreements you need to strictly follow the contract terms. The type of product determines if it attracts value added tax.

Choose a Location

The location you choose should be easily accessible and visible. You need to purchase a utility vehicle for product haulage.

Rent a facility that has large storage space for your products. The shop should be secure to prevent theft and loss of inventory. A good location is a commercial area or newly developed area.

Secure Funding

Although the company will give you the products discounted you need moderate funding. Some manufacturers require cash investment before granting representative status.

Other funding requirements are leasehold, storage equipment, transportation and marketing. You can source funds from commercial or trade banks in your locality. Present your business plan including your contractual agreement and other necessary documentation.

How to Secure Manufacturer Representative Contracts

There are a few ways to secure manufacturer representative contracts. Approach the company directly and provide proof of competency. They will direct you to their sales department and provide procedures to follow.

Another way involves using the internet to find products to represent. Contact the companies through there respective websites and fill an application. The third way is to send an email to the company stating your purpose.

Marketing

To succeed as a manufacturer representative you need serious networking. You should network with manufacturers and consumers.

Your market demography should be specific to one geographical area. Develop a relationship with wholesalers and retailer in your locality.

You need a large warehouse or storage area for the products. Marketing considerations include hiring commission base reps and advertisement.

Use online resources such as social media and blogging. Market your products at trade fairs, conventions and open market. Print flyers, poster, billboards, business cards and signboard.

How to Start a Sales Agent Business

• Choose a product
• Write a business plan
• Carry out a feasibility study
• Secure funding
• Find an ideal location
• Find the manufacturers
• Contact and prepare a speech
• Register your business
• Negotiate commission
• Market the products