It is estimated that one direct hire salesperson costs a vendor between 2.5 to 3 times as much as hiring an entire rep agency with multiple sales reps.
Manufacturers’ Reps are able to spread the operational cost of running their sales force over multiple streams of income because they typically call on accounts for multiple product lines. This results in enormous savings for each vendor.
Manufacturers’ Rep firms are made up of experienced salespeople already entrenched in and familiar with the territory, its customers, the politics of the market, and its geography. They know the customer base on a deeper level and usually have lived in the market for years. They already have existing relationships and do not need to build them from the ground up.
All sales calls, service calls, fieldwork, and interactions with a customer help the rep and vendor build the relationship with that customer. Time spent with customers on any product line helps all vendors’ product lines.
Rep Agents are constantly in front of the customer. Once a direct salesperson has made their pitch; he does not have the luxury of coming back without an appointment. A Manufacturers’ Rep always has a reason to be in front of the customer.
The fact that people buy from people they like, trust, and feel comfortable with is well known. Manufacturers’ Reps have relationships with, and are selling to, the customers that vendors want to do business with already. Since the easiest customer to sell a product line to is an existing customer, in many cases it is easier for a Manufacturers’ Rep to sell to the vendor’s prospects.