How a Vendor Views Reps

No, thank you for opening up a forum to discuss something like this.......I find it interesting that there have been many comments from manufacturers about how many bad reps there are, but now that I have brought to light the other side of the fence ......nothing.........dead air. Its nothing new.....years ago I worked for a well known wedding band company and got the NY metro area up to almost 3million dollars. How was I rewarded, my territory was cut down to where I started 10 years previous to that! So there are good professional reps out there also but many have been treated unfairly and its no wonder there is a major issue between manufacturers and salespeople. Until its realized that both parties need to do their job well and you are a team and manufacturers stop biting off the hand that feeds them......I dont see it getting better.

Thanks for the update and best of luck to this short-sighted company who is obviously in financial straits, trying to minimize costs and maximize profits at the expense of its jewelers who entrusted their business with them, undoubtedly because of this rep. And truly, best of luck to the rep caught in the crosshairs here, who instead of being rewarded and valued for doing an exceptional job is swept away. Here's hoping a financially responsible and morally sound company will find him, appreciate him, and pay him what he is worth. By the way, had you mentioned the company name I would not have deleted it, but someone else might have.

Well, Im back and even more disgusted. Salesmen are damned if they do and damned if they dont. Its our fault if the manufacturer we represent doesnt take care of its customers.....its our fault if we leave because the manufacturer doesnt live up to what it promised our customers......when things are going well its just....expected. When things change and we move on its "look what you got me into". Now here is a good one.....a major line (would love to mention their name but If I do this commment will be deleted) recently fired its Northeast rep for doing too good a job. I dont know him, but know for years he brought this company to the table with his customers and built a 3mm dollar territory....he is well liked, and respected, and said company felt he was making too much money and has now fired him so they can hire a new rep for a low salary package as they now feel they are their customers and they shouldnt have to pay,,,,,, I suppose doing a good job is now our fault also.........sorry but this one just takes the cake.

Regarding the post about www.v-by.com. The classifieds are not in the blog section of this web site.

PEDDLERS? Thats a positive comment, no wonder the retail gig did not work out, I am curious, what did you call your customers.

I had the GREAT priviledge of learning to be a buyer by the Peddlers that called on our store. They had knowledge of what they sold and an understanding that I did not have it. Maybe it was self-preservation that they took the time to teach me how to be a good non-buyer because if I bought poorly, it affected their livelyhood. There is another factor that some vendors may not take into consideration. That is, if the rep is pressed for money to do what is expected, even though they may not say is directly, their attitude toward the vendor and their goods may be less than the vendor desires comes across in subtle ways . . that's human nature. Since leaving retailing, I have worked as a consultant with new reps and with vendors on what expect and on what to expect from each other. Both need each other more, maybe than each other thinks. Reps are not paid by the vendor, they are paid by the vendors' customers and their customers. It is the latter that provides the money for both the rep and the vendor to exist. Sure, vendors want to protect themselves from deliquent payments by not paying their reps until the money is in the bank. And, reps need funds to do what the vendors want -- call on customers, take care of problems, make sales. Between the two there has to be a mutual interest. Vendors have to remember that if they have to get out and travel, they are not producing goods, managing the business. So, which is more important? Hire those to do what is the least important. it's the vendor's choice. Btw, this problem is not limited to the jewelry industry. It is everywhere in evey industry everywhere and is not limitied to the US.

Does anyone really think we’re ever going to go back (or negotiate back) to the way it was? It seems apparent to me (after doing it for 18 years) that the old school way of repping has become passé. It doesn't matter if you’re a designer/manufacturer, a rep or a retail store. We have to come up with a more affordable way to get new designs into the stores. After much thought, time and action, I have come up with a way to keep my products fresh in my stores without the same costs and dangers. Last year, in between my regular business calls, I sold an extra $200K of product. My retail stores enjoy it and my designers like getting the orders! V-BY. If you are willing to grow and learn, try it! It keeps me cutting edge for all involved. I refuse to let the old times get the best of me! Check out www.v-by.com

Growth without reps.? I call shenanigans. I'm guessing somebody got really lucky at a show with one or two large orders. Any professional road warrior (including myself) knows that trade show attendance is virtually non-existent. If I were a manufacturer, I would be looking to hire professional reps. to spread the word about my line. A fact- of-life is that jewelers still like to see what they are buying. Unfortunately, being a road warrior is becoming a rich man's game. An overnight trip costs $160-$180 per day(fuel,food,hotel). Good talent is hard to find because strong reps. are already partnered up with strong companies. There is virtually ZERO new talent coming into the road warrior profession because it's expensive to simply become a road warrior. When I got into the game several years ago, I personally spent around $2000 for a safe and security system before I could even get insured. To the manufacturers that might be reading this - Take a look at the foot traffic at your next show and think about this: 1. There are a lot of jewelers that won't buy from you, simply because they didn't come to a particular show 2. A rep can get your line into the very faces you didn't see at shows 3. To get good talent, a draw is preferred. If that's not possible, pay commission on invoice; not on payment 4. Trust us - In our particular markets, we know more than you do. You might very well be selling the wrong store for your product. (How would you know if you've never been to the store or the town?) 5. Be patient and expect small orders - When our customers don't know your company. They typically won't spend large amounts of money until they are confident in your company 6. Hire business-people - Professional reps. run a business. Profitability benefits both the rep. and manufacturer. Hire people that understand this.

To Vegas-Show: The shrinking market, especially with retailers, has been addressed and discussed in earlier blogs. I have commented that the number of jewelers going out of business for one reason or another is out-pacing manufacturers' demise. There are too many vendors and too few jewelers with fewer and fewer dollars to spend, as I have stated time and time again. That reality is not only assumed here, but has been recognized over the past several months of this blog. My contention has been that while the market is continuing to change, there are some in the business model (of vendors/reps/jewelers) who are veering off in the wrong direction---mainly the vendors. But maybe that is what needs to happen to thin the herd. I appreciate what "Grateful Mfr" had to share. It is one of the most positive responses I have seen and heard. Hopefully there are more out there like him, because there IS business to be done. It is the approach to the opportunities which makes a difference.

Jeffrey, The rapidly decreasing number of independent jewelers in the US market has not been addressed in the equation. The cost of a rep securing sales at a greater cost of business because of more travel and more HOURS on the road. The dollar reward versus the costs will continue to diminsh!

Jeffrey...this debate is SOOO overdue....kudos to you for adressing this ......I would like to see a weekly storyline/blog where reps and their bosses can speak freely....great work!!

Jeffrey, very impressive you would tackle this, bring it out to the open, and stir so much thought and response. I own a jewelry manufacturing company which traditionally supplied blanks, castings, etc. to other mfrs/designers, as well as some finished goods to the majors. A few years ago we decided to bring finished jewelry to the independent jeweler market. At that time we had lots of advice about how to build a sales force and structure the management of it. One thing I knew for sure was that if my products were ever to get any traction or penetration in the market, it would require a full time effort by everyone involved. I didn't have the time or patience to allow it to build slowly. Therefore, I made an unpopular decision a the time to hire full time reps as employees, pay them a competitive, living salary with bonuses based on goals and incentives. Initially we hired 10 experienced reps in various parts of the country. I committed $1million in the first year to make it work. We took out a line of credit to make sure we could sustain our commitment. We didn't need it. Sure it cost some up front to get it rolling, but our rewards came in much more quickly than we had planned, with each rep producing well beyond his initial objective. Ten years later we have doubled our salesforce and doubled our revenues twice over. There is no way it would have worked with a part time sales force and I have loyalty well beyond my expectations. Loyalty and commitment run both ways.

Wow, Jeff! The sheer number of comments these past few days tell you what a contentious issue this is. Well, here's my .02 cents worth; If a vendor can afford to produce a line but, can't afford to pay for its marketing (representation) then, they're well on their way to going under unless, they're calling on retailers themselves. All this talk of pricing, gross margins and such.... Ladies and gentlemen, the game today is real estate. Reps that are out there opening new accounts are doing so at the expense of another line coming out. The battle is for case space, real estate inside the store and frankly, the one who pays the most attention to the retailer's real estate gets the orders. Yes, I used the plural (orderS) on purpose because the independents are becoming more like the majors in analyzing their businesses; sales per sq.ft., etc. Therefore, the successful reps are as concerned, if not more concerned, with sell through than with sell in. The successful retailers provide a high level of customer service to their patrons and they expect the same from their suppliers.I know many of these reps and some are dealing with cutbacks in pay that have been across the board, from the CEO on down. Then there are those companies who eliminated sales forces all together....Don't you think the retailers know who they are? Once again, the retailer is going to choose the supplier that maintains the highest level of customer service. For the first time in my 30+ years of recruiting, I'm seeing some great talent caught in the crosshairs of this downturn. The tough ones, the good ones are going to make it. Just because they've got what it takes in any economic climate. As for the guy you spoke with, Jeff, and for others like him, all I can think to do is quote John Wayne, "Life's tough, it's even tougher if you're stupid!"

Jeffery: great job my friend.. How do companies treat reps... I know a rep who has taked the smallest territory in a company to the #2 sales position. he is on the road all the time. Just last week he is in the middle of a 2 week trip gets a call from his company. You are behind in draw and we have to cut it. Give me a break. As an ex Sales manger it is well know the jewelry business is in a deficet until September - Oct for road guys and we make 35-40% of our retail volume in Nov Dec. Every company knows they have to support the rep for the first 6 months of the year. As for the companys that don't want to do this you are most likely working on a 45-50% margin. The money you pay to support your reps is also PR..I ran a company in the 80's called Jewelmont ( They are now gone) Anyway one of our long time reps retired. I went to a store with the new rep and the jeweler actually cried because he not only lost a rep but a friend. Those days are gone. I as a retailer want a rep that knows and cares about my business. Trys to find the way that he can help me. If these companies do not have reps, go ahead hire a person who doesn't speak English have them call me to sell me.. GOOD LUCK I'll buy from stuller

Dear FedUp, You hit it, the manufacturer's have been skirting the law for many years when it comes to employment practices, now when it gets tough they want to walk away and drop the the people who made their company, it's time we expose there fraud.

J. Roberts, I think there are many out there who can empathize with you right now. It is unfortunate. I read with interest the comments from "Fed Up" where it says the industry cannot attract young, sharp, dynamic people as reps anymore because there is no money in it. Someone else commented to my directly they had interviewed an extremely bright and capable young woman who was interested in going on the road after having worked in a jewelry store for a few years. The offer was made to contract with her as an independent rep with a draw. She would have to incorporate, pay own expenses, cover all tax liabilities and insurance, etc. Her father, a owning a CPA firm, looked at the offer and evaluated it, finally telling her there was no way she was going to take that position because it would not be profitable move. Now, this is anecdotal for sure, but emblematic of the industry nonetheless. Good luck to you and be safe.

Nobody trusts or respects anyone in this industry anymore. I can't wait for the owners to start taking client calls on weekends and evenings, its ok with me, I have nowhere to go, just sitting in a hotel room babysitting the line.

If you don't value the team chosen to represent your Company's products and be willing to pay a reasonable amount for that for that representation - I say do it yourself. Unfortunately you will probably go broke before you realize it won't work. My Company primarily sells the majors. I've been a rep for 31 years. Rather than squeeze price without understanding, it would be better that the retail community understand market value ranges better (cost of labor, cost of goods, cost of service etc) and then fix a reasonable cost plus margin for their vendors, one on which a manufacture can survive if managed properly. The Walmart/Sterling formula is somewhat that way - they for the most part understand market stone and labor values, because they make a point to understand. Yes it's tight, but you do know where you stand, and if you can manage your business within that framework - it can work. But, if you work with customers/buyers who for the most part don't have an accurate understanding of manufacturing costs, and continually squeeze with no understanding - then - more trouble for everyone. We have all been forced to cut back so far that we are reaching the line where inefficiencies show up, and even a good company starts to run rough. We have two or three more years to get out of this mess, and only that short a period if consumer credit gets paid down. I'm not sure that the accumulated job loses and the new administration's programs have not stressed the consumer to a point where their credit pay down has/will become secondary to survival. It isn't finished yet either. It would be better if we all tried to work together more realistically/reasonably during this period. The words 'Vendor Partner', and 'Win Win' typically scare a vendor because it's all been 'bull'(you had better tape up fast when you hear it) but that is what needs to happen in our vendor/customer relationship. Good luck to all -

Back to the original blog...is the manufacturer performing as well as claimed? Or, has the vendor made adjustments to, say, margin, to accomodate retailers demands in these economic times to maintain? Were there cutbacks in advertising? Price over passion? If all the salesperson's attention is going to another vendor, why? What circumstances would make that happen? Clearly there are two sides to this story. GREAT blog...there are certainly more questions here than answers. At the end of the day it is usually the salesperson that gets let go...the very hand the feeds the company (assuming the company is dedicated to growth, service, etc.)!! There are too many fabulous salespeople out of work NOW! Seems very backwards to me. Fact of the matter, I work hard. WE ALL WORK HARD. And, there is AWLAYS danger for everyone. The fiscal responsibility/accountability has to be on the manufacturer/vendor to provide a healthy industrial climate. As stated above, "operating on razor-edges" is the beginning of the end.

One point has now been made a couple of times and it is very valid: There is not enough margin in the business for vendors. Manufacturers of all types have been squeezed by the incorrect assumption of retailers that they have to continually seek a better price. This is the WalMart mentality mostly driven by the majors as "feed up" (did you mean 'fed up'?) pointed out. We are in the jewelry business, which is not commodity, but more luxury. Price is a factor only after other criteria have been met such as DESIRE, STYLE, and QUALITY. But we, as an industry, have elevated price over passion and motivation. This has happened at the sales counter of the jeweler because they have been lured by industry wolves constantly circling and enticing them to buy more on price than on principle and passion. There are few who stand for anything anymore. Look at the examples of Penny Preville and Beaudry who have been forced into bankruptcy because they could no longer afford to keep the high marketing profile required to drive such businesses. The problem wasn't necessarily as simple as them being mismananged or greedy, but more likely over-extended due to the pressures associated with their profit margins having to be way too low over the years...operating on razor-edges. I think many manufacturers/vendors are under the same problems right now because we have all made the market to demand it. Until that changes and vendors can be in a position of making money just like their customers (jewelers) do, we will continue to see bankruptcys, downsizings, letting reps go, and attitudes like the one Jeffrey encountered in his phone conversation. The industry is in sad shape.

Jeffrey, I too have been in management and on the road. One of the things I have run into as a manager is owners who want to have it both ways. They want to pay reps as a contractor and have them perform their jobs as an employee. Most of this industry is either unaware or playing the odds with IRS guidelines concerning Independent Contractors. Asking for exclusivity or call reports or putting restrictions on the way the rep performs the job are all putting the rep into the employee category. Now, as to the way reps are compensated. Independent reps are asked to cover their own expenses, pay all of their payroll taxes and both halves of their social security, travel and present product and programs to their contact list with no security that they will be able to keep that line for any length of time, all for 10% or less. Lets take a guy for an example. He has 5 big states and to run through his territory and do his job properly he needs to spend $35K a year. His line pays him a draw of $1500 a week ($80K a year) at 10% commission. He has to pioneer that line the first year and lets say he sells 800K but he is paid on payment and the terms push 300k into the next year. At the end of the year he has spend $35K and earned $50K but his draw was $80K. He has a net of $25K left over from the draw to pay for his house, car, kids, heating, electric, entertainment....LIFE, all for the privilege of owing the company $30K at year end. Use your money to build my business.....who would take that job? Not any young, sharp kid coming out of college. The main problem is the margins manufacturers are allowed to make don't cover a reasonable cost of sales. This is because the barriers of entering the business are too low and many start up companies can come into the business and knock off designs and undercut prices. Independent Retailers are forced by majors to present similar (ridiculous) retail price points and the margin cuts come from sales. The business model is broken on many levels. We all have friends outside this business who think we are nuts to work like this. It takes 3 years of the same rep calling on the same customers with the same line to build up a book of business that will support a salesperson on commissions alone. If companies are not willing to accept that reality up front then we will continue to get the same churn we see now. If they can't afford to do it then they shouldn't complain when reps don't miraculously bring the business in the first few months and they probably should stay out of the business entirely because they are screwing it up for those companies who actually have a shot at making it. Stay out of the shows and sell your stuff at small town street fairs. This industry needs business, not people content with having a job.

My first job, a pump jockey at the local Esso station, I guess this shows my age, anyway these were entry level jobs I was 14, but it was a life lesson, show up on time, be presentable, and TAKE CARE OF THE CUSTOMER. Some where along the line we forgot about the customer. Circuit City's management felt it was in there best interest to fire the best and highest paid sales people, look where they ended up. Its amazing how many owners just brush off the importance of a sales force or a single rep., go ahead and run your business from your office while we take your clients away with old fashioned sales and service.

Well, I have been sitting back on the side lines for the past few weeks of blogs and loving the fact that Jeffrey had the backbone to open up this dialogue. Having been on both the sales reps side of things and management side of things and being able to put myself in all positions including the jewelers, I would have to say I have never been happy about the way most companies treat their salespeople. I wont reiterate all that has been said in the previous blogs as I believe Jeffrey has covered alot of my feelings (including his conversation with the one above). There are different ways to go about building your business in this industry so I do believe its all a matter of what you want to accomplish. If you are happy with a small company that only gets its customers at trade shows, offers your customers no service, and only has moderate growth that is your perogative.....my belief is more manufacturers instead of taking the attitude "how can I do more business" should be asking the question "what can I do to help my customers to do more business" and everyone will win. I was recently at one of the A+ doors in my region, hell, in the country.....I opened up this dialogue with them. The buyer told me that one of the crystal companies that recently let go of its whole salesforce (no names mentioned) called and asked him to please run a sold report for them and they would be glad to refill the pieces sold. He told his buyer to tell them he is too busy running his day to day operations to start having to do this for all his vendors on a regular basis, and that when he purchased from them, it was with the understanding he was not only buying a product but a service and when they have someone to come back out to service him he will be glad to buy from them again!!! I shook his hand and thanked him for the way he is handling the situation. He told me he knows he is losing sales on this product and others but will not buy from companies that dont have more to offer than a bunch of stuff!!!!! I think this says it all. So the gentlemen above will not grow his business, nor all the companies that felt the need to fire off the salespeople that put them on the map in the first place. There are good reps out there that take what they do seriously and professionally and if companies think that they can "do all their business" at the trade shows they are sadly mistaken unless they choose to stay a small company with modest or no grwoth. Yes we are in tough times right now.....but that will change in time and in the mean time treating the people that brought you to the game, and grind it out everyday, sleeping in hotels, being away from their families, dealing with security risks, etc as disposable is just unacceptable. There might need to be adjustments made for current times but that doesnt mean the rediculous extremes companies have gone to with their salesforces! Anyway, enough of my rant.........

On April 24 I wrote a blog entitled "What Do Reps Do For You?". In it I detail the activities and effectiveness of a good rep. I know there are plenty bad ones out there. I have been on the hiring side myself and have seen how difficult it is to find good ones. The good ones are usually already working for a vendor, know what they are doing, and know the grass isn't always greener. Things have changed a bit recently, though. There are many good reps suddenly without jobs. Problem is, there doesn't seem to be too many good vendors looking to hire or contract good reps right now. Maybe it will change, but my point is that many vendors have taken a very short view of their business and the market. It may be they don't have the financial strength to take the longer view and approach, but I firmly believe their business will suffer without a proper commitment to field representation.

Jeffrey, My point is made by once-a-vendor. The industry does not provide a margin anymore for a vendor to put the loss of a draw in the cost.The rep must pay health insurance, gas, food, lodging,in a economic climate where all of those expenses are increasing and it is ludicrous to downplay safety as simply peril. The economic costs of the expenses are real and the human safety issue is vivid. A full service gas station is rare and a full time rep will follow this demise.

I cannot understand how reps think a compnay owes them any more than an opportunity to sell and make a commission. I have been reading Jeffrey's blog now for some time and understand he is on the side of the rep more often than not. What about the reps who leave companies owing draw with no intention of ever paying it back? I have seen NO discussion about those types. It is only the one-sided commentary about the pitiful, poor rep who is slogging his/her way through a territory at great peril and expense. All the while, the company has placed all its faith and hope for success in that territory in that ONE person, who they HOPE is out doing thier job every day. And what about the rep who leaves the manufacturer for "greener pastures" leaving them with a territory to fill with a vast void of good, talented people out there. Most reps are "hired guns" and only worth the commisssions they earn through sales! Seriously, how about a little perspective here.

Jeffrey, Outstanding journalism and perspective on an industry that wallows in too much "Cheerleading" press. The American market will have to adjust to the "new normal" 12 to 18 months from now. The opportunity to rep 1 to 3 lines and make a "good living" is gone and will not return. The future for reps will probably be a "seasonal-micro_rep". Travel will be adjusted only to delivery for 60 to 90 days in the Fall with sales calls being on the weekend and early evenings to jewelers in Sep-Oct. Jewelers will make time out of need to fill in a few items right before the season. Privates and a full-time job will be a "reps" job.