Page 91 - Lighting Magazine January 2019

Many have said, “If you are in the ‘middleman business’ — get out of it!” In the lighting industry, however, reps are as indispensable today as they were 20+ years ago. Improvements in communi- cation (i.e. e-mail, websites, Skype, Slack, Zoom, Google Hangouts) are actively being used as tools by representatives rather than tools to replace representatives.
Lighting reps are the most cost-e ective path to market for most companies. If the lighting manufacturer is a start-up – and a lot of really cool innovation today is coming from new companies – they cannot a ord to hire a representative in each city or state to market their products. Reps are paid on a success basis — which means they are only paid if they sell something and the funds collected. They cover a de ned territory with boundaries set by the manufacturer.
From the factory’s standpoint, the rep network is a work in progress. While there are consulting companies that can set up the rep network for a fee, the problem is that this is just the beginning of the work ahead. Se ing up the network is never a case of standing back and saying, “Voila! It is all done and it’s perfect!” It might only be “perfect” for a brief moment in time. Rep rm ownership chang- es, people retire, and the line card changes. These variables require an astute sales manager who can keep a nger on the pulse of the situation and make changes as needed.
I heard an interesting quote from an a orney: “Everything ends...be sure to plan for it.” It is far easier to sort out any potential separation disputes with a good contract before they happen. In my work as a manufacturer, I have always kept rep con- tracts short, typically 2.5 pages. If a factory sends a contract that is so long that a team of lawyers has to review it, the relationship with the representative may start o on the wrong foot.
Choosing rep organizations is similar to sta ng your company; there will be good employees and bad ones. Finding the good ones is not only key for the success of the manufacturer and the retailer, but from the rep’s standpoint, nding good lines is key to success as well.
Many manufacturers say they have a “love/hate relationship” with their representatives. I have always looked at things di erently. If something is not working as intended, I revert to introspection: Am I doing things properly? Do I view the relation- ship as a partnership? Do I have systems in place
to support the reps? Do I provide them with the tools they need? Do I travel with them? Do I pay commissions on time?
Everyone is squeezed for margins these days, including the representative. Some manufacturers have lowered commission rates, but commission is generally the only income stream for a rep agency — and it needs to cover payroll, bene ts, travel, and operating expenses. In most cases, overage is not an option with lighting retailers.
it’s symbiotic
The representative and the retailer have a symbi- otic relationship, much like the clown sh and the sea anemone. The sea anemone is protected by the clown sh, which eat small invertebrates that are dangerous to the anemone. In turn, the clown sh is protected by the stinging tentacles of the sea anemone. They need each other to thrive.
The representative also brings together the third leg of the “milking stool” by being the liaison be- tween the manufacturer and the showroom.
The representative is the rst line of contact between the retailer and the manufacturer.
“Lighting reps are the most cost- e ective path to market for most companies.”
rep oF thE futurE
January 2019 | enLIGHTenment MagazIne 89