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Q: Industry practices ( No Answer,   2 Comments )
Question  
Subject: Industry practices
Category: Business and Money > Small Businesses
Asked by: boomering-ga
List Price: $20.00
Posted: 29 Jan 2003 21:24 PST
Expires: 04 Feb 2003 15:52 PST
Question ID: 155106
I have a job opportunity to be a manufacturer's rep, and it will
require the use of a piece of equipment made by the manufacturer, an
analyzer of sorts, and unique to that manufacturer. I will be selling
the company's services and products, and the analyzer will be an
essential tool in making these sales. My compensation will be straight
commission. The manufacturer wants to sell me this equipment at a
reduced price, but still at a substantial profit. I've explained that
because I am on the same team, because I'm trying to build a business
which will directly benefit the company, the equipment should be
provided no-charge, or at least at direct cost and paid for over time,
and payments should be charged against my commission, not
out-of-pocket. This is a new approach for the manufacturer, so there
is no precedent. Since I won't be paid salary or expenses, and since
it will take some time to build the business, an additional burden
(i.e., large out-of-pocket monthly payments) will not enhance my
chances for success. This analyser lists for $30,000, but the cost to
manufacture it is probably around $5,000.

My question is this: Am I making a reasonable request, and how are
similar situations handled in industry? I'm looking for analogous
situations which will back my position.
Answer  
There is no answer at this time.

Comments  
Subject: Re: Industry practices
From: omnivorous-ga on 30 Jan 2003 15:20 PST
 
Boomering --

Let's see: the company isn't making its numbers, so it doubles the
number of reps (cutting everyone's territory in half) and pumps the
number of "sales" up simultaneously.  This is a risk reps can't carry,
particularly for capital equipment.

Manufacturers' reps and company sales people always get demo units;
resellers (distributors and retailers) have to pay for them, though
they routinely get inventory protection against discontinuances and
price changes.  And of course, they're buying at deep discounts.

New companies without any demonstrated market are under a particular
onus to make sure demonstrators are available to their reps AND
resellers at no charge.

You'll find it's such a standard practice that a Google search
discussing use of manufacturer's reps note that samples, literature
and case histories are expected to be provided.

Knowing that you're in Chicago, you might want to call Jack Berman,
probably the best-known person in the rep business.  He's at:
Electronic Representatives Association
http://www.era.org/whatisera/indexA.shtml
(312) 527-3050

Best regards,

Omnivorous-GA
Subject: Re: Industry practices
From: boomering-ga on 01 Feb 2003 13:30 PST
 
Omniverous,

Thanks for the comment; I'll try Jack Berman and see if he can give me
a little perspective.

Best Regards,

Boomering

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