When negotiating a contract
with a prospective
representative, you should be
aware of what he or she
normally wants. Here is a list
of points that he or she would
like to have:
Prestige products.
Exclusive territory.
Good product line
(either one that sells
easily and has a large
market or a high-cost
product with a small but
monopolistic, market).
Training from the
manufacturer.
Technical aspect of the
after-sales-service
provided by the
manufacturer.
Warehousing back-up by
the manufacturer.
Ready parts
availability.
Good warranties from the
manufacturer.
The manufacturer to
carry the cost of labor
and parts needed to
replace defective
components.
Advertising and
merchandising support from
the manufacturer (or at
least an allowance for
advertising).
Special discounts and
deals.
Favorable credit terms.
Commissions on
"house
accounts".
Commissions on direct
sales by the manufacturer
in the rep's territory.
Manufacturer to assume
the responsibility of
keeping his other sales
outlets from selling in
the representative's
territory.
Minimum visits and
control by the
manufacturer.
Representative must
supply only minimum
information to the
manufacturer.
Freedom to handle other
lines.
Freedom to price.
The right to terminate
the agreement when he
pleases.
To have the manufacturer
pay indemnities for
cancellation of the
agreement.
Security that the line
will not be taken away
from him once the product
is established.
Cheaper packaging of
goods to reduce bulk.
Dealing with one person
in the home office.
Trips to the U.S. or to
regional meetings.
Product liability
coverage.
A good website - your
website is often the
deciding factor as
Obviously, no manufacturer
will meet all these
conditions. Companies whose
probable sales in a given
market are not going to be
very great or whose name is
not internationally known may
have to grant more demands
than others in more favorable
positions. Firms seeking
representatives in
"representative
short" markets will also
have to yield more than they
would where there are many
experienced representatives.
The same manufacturer may be
quite happy to grant some of
these requests in one market,
but not in another.
