Recently, I spent time with a friend who has been a jewelry manufacturer’s representative for 20 years. The conversation turned to business and how the rep’s job has become more difficult. It’s more dangerous and also subject to unrealistic expectations from many in the manufacturing community who use the services of these road warriors.
Today’s reps face three major problems: security, compensation, and manufacturer integrity. Reps are targets of criminal gangs that prey on members of the jewelry industry. They’re responsible for hundreds of thousands of dollars in sample lines. Many manufacturers have developed sample lines that use synthetic gemstones and brass, but others, because of the unique nature of their lines, use genuine gemstones and real gold and platinum. The thieves who track traveling sales reps don’t know what’s in the sample cases, so carrying brass and glass doesn’t exempt you from danger.
As for compensation, most reps are paid on a straight commission basis, pay their own expenses, and provide their own benefits. They are considered independent contractors. Some manufacturers require their reps to buy the equipment needed to execute their responsibilities. Manufacturers’ reps travel extensively. They operate in an industry with two short selling seasons, and many believe that for manufacturers there is only one selling season now—the holiday season.
Straight commission works fine in an established territory. But it takes time to introduce a new line to retailers. The rep and the firm usually understand there is an introductory time period before the line takes off. But in today’s make-a-profit-now environment, unless a rep produces significant revenue immediately, the relationship lasts only one or two seasons.
And what about integrity? Based on my own experience and the comments of salespeople, some manufacturers play games with billing to minimize commissions paid. Often these “discrepancies” show up in mail and phone orders. Shortsighted manufacturers either try to reduce the commission rate on this business or eliminate commissions entirely. Why would a manufacturer set him- or herself up for failure just to save commission dollars paid on a sold order? Inventory turn is the name of the game, and mail and phone orders improve inventory turn!
Reps are like the retailers they serve. They love what they do despite the difficulties. And for both, lack of vision and the inability to invest in the development of a sales territory are two constraints caused by the tough economy during the years since 9/11.
From a retailer’s perspective, a good rep can provide a wealth of information about the region in which he or she travels. What’s hot? What’s not? Who is succeeding? Who is failing? What kind of promotion efforts work? It is all part of a good rep’s repertoire, and it’s all there just for the asking.
Next time you work with your traveling reps, be aware of these problems … and keep a watchful eye on their physical and economic security.