Volume 8, Issue 10 - November 2007

Mr. (and Mrs.)  Independent 
Independent Reps Rise in Fenestration Industry
by Sarah Batcheler and Penny Stacey

Patrick Junker is an expert at working with the independent reps. The vice president of sales for HOPPE North America in Fort Atkinson, Wis., says the difference in using independent reps and using internal salespeople has a range of trade-offs. HOPPE utilizes 13 different independent rep agencies throughout the United States.

“The ability to direct versus coach. Cost. Selection of direct people versus the agency ... meaning, I can choose whom to hire person by person—I don’t have that ability with an independent rep,” says Junker.

Randy Cohen, vice president of sales and marketing for Frank Lowe Rubber and Gasket Co. Inc. in Farmingdale, N.Y., has had positive experiences during the past 25 years with independent reps.

Frank Lowe uses this type of salesforce for many reasons, but Cohen says, “The number-one reason is to provide onsite service to the customers, to develop and build relationships … I have them across the country as opposed to me or my salespeople having to travel across the country—they’re a phone call away.”

Although choosing the direct employees with which to work may be a benefit, in many cases, the suppliers are able to build relationships with independent reps better than direct salespeople.

“[A] long-term relationship with an agency versus more short-term with a direct or regional salesperson [is advantageous] due to desire for advancement and the tendency of us all to move jobs every few years. That does not typically happen with an independent rep firm,” Junker adds.

He adds that most independent reps have also developed relationships that can come into play when making a sale.

“A well-trained and focused direct person can be just as hungry [for the sale] ... but you receive instant creditability as the manufacturer with a good agency, due to the relationship already in place with the companies’ other lines being sold or a relationship already in place with a new prospect that you don’t necessarily have with a direct salesperson,” says Junker.

Cohen agrees. “I would probably say the biggest difference for us, versus the measurement we’ve had with inside sales staff, is the years of experience that sales reps bring and the vast knowledge of working with manufacturers.”

Junker says that independent reps also have the ability to familiarize themselves with a company’s entire product line, which means the rep can assist a customer who’s not sure for what he is looking. “The independent rep can be a part of much more than the specific product line or system under review and, in many cases, has a very good understanding of the customer’s entire product line and business philosophies, so they can interact with both the customer and us to obtain the best business solution for the given opportunity,” says Junker.

The Times are Changing
Ed Robinson, president of PRYSM Marketing, an independent rep in Doylestown, Pa., says that technology has made it easier for suppliers to work with independent reps—who normally cover a larger area than a salesperson might. Robinson reps multiple lines including Unique Balance, Venture Tape, Silver City Aluminum, Vinyl Extrusions, Hoppe Hardware, Bayform Industries and many more. “That’s the biggest change—the way we market to the customer by Internet and e-mail,” says Robinson, who adds that it gives him the ability to cover a large area. “Geography means less than it used to. Now you can be based in Boston and service a customer in Chicago. My job has jumped traditional geographic territory.”

Independent reps say they also sometimes have a broader product line to offer the customer than an individual salesperson might.

“We have more to offer the customer,” says Miller. “If a customer doesn’t like what a direct salesperson is offering, the salesperson won’t go back. However, I go back and sell different lines to the same people.”

Wanda Seaver, founder and president of SeVan Sales Inc., an independent rep firm in San Marcos, Calif., agrees. “We have direct contact with the customer and that provides us with valuable information that enables us to serve both the customer and the supplier. When we do our job right, the customer receives a better product and the supplier increases [its] market share,” says Seaver.

There are cost savings as well when using independent reps.

“Just the traveling alone is a tremendous savings,” says Cohen.

“We don’t pay unless there are sales made,” says Junker. “The independent reps take care of all their own expenses, etc., so the new cost is a known number based on the rate and the total sales dollars ... no hidden costs for insurances, travel expenses, vacations, etc., that you have for a direct person.”

The Cons
Using independent reps has its drawbacks.

Derek Miller of Window Components and Supply Inc. in Phoenix says that when working with captive salespeople, customers sometimes get more individualized attention, than with independent reps.

“In this region of 11 western states, we have six individuals with specific territories,” says Miller. “There’s more face time.”

However, Seavers says she still puts in lots of personal time with customers as an independent rep—which is good for business, but can be tough on her. She cites constant travel as one of the drawbacks to working as an independent rep. “[You are] learning how to balance your schedule so the suppliers you represent know that they are number-one on your line card. .... and finding time to always follow up with your customer,” Seaver says.

Making sure you’ve chosen the right companies to represent is also a concern.

“The risk is constantly worrying about your principals, adding that you are at the mercy of your principals,” says Miller. “It’s a huge risk.”

Likewise, once you have found a good principal, sometimes it’s still a concern.

“The more successful you become, the higher risk you are for that principal, since [your supplier] could cut that expense in half,” he says.

Seaver echoes Miller’s concern.

“Remember, we don’t get paid if both sides are not kept happy,” she says.

Tracy Califar, an independent rep for American Weather Seal and Hurd, says starting out is the toughest part.

“We got hooked up with some good companies and we just kept working,” he says. “Things take a while to grow.”

Likewise, Califar found that he had to start small.

“Not everybody wants to turn over existing territories that are thriving,” he says.

Job Security
Despite these concerns, most independent reps agree that once reps get started, there’s one thing they don’t have to worry about: job security. “If you continue to have a good relationship with the principal, you’re not going to be eliminated by another independent rep,” Miller says.

Robinson says the growing market doesn’t hurt, either.

“For the last 13 years, [the] window business has been growing. It’s been a pressure to the supplier but, since 2006, that has flipped for the manufacturers,” he says. “The supply side has been very aggressive. We’ve seen a real flip in where we’re spending our time trying to gain new business. It’s usually a three-year cycle and then it will grow again.”

Seaver has some advice for those starting out as independent reps. “Remember that as an independent rep, you are serving both the manufacturer and your customer,” she says. “Don’t hesitate to go the extra mile for your supplier or customer … they will remember. Always try to put yourself in both the customer and supplier’s shoes. It will always help you find the right answer.”

Robinson adds that it’s important to focus on product benefits—not price.

“Focus on upscale components and up-sell their benefits, instead of just, ‘mine is cheaper than yours,” he says.

As in any business, Seaver says reputation is of course important. “You determine how much it is worth,” says Seaver.

Window Manufacturers Weigh InHurd Windows and Doors in Medford, Wis., uses both independent reps and a company salesforce, but Joe Herman, vice president of sales and marketing says, “I really have no preference—I just want the best salesperson I can get. I don’t look at it as a savings or an added expense.”

Herman says that there isn’t much difference in cost for the company. He does say he has noticed that independent reps can be more eager for the sale of one of their products. “If they don’t sell, they don’t eat,” says Herman. “But we pay all of our salespeople on a commission basis so the good company guys that want to make more money are pretty ‘hungry’ as well.”

“Company salespeople only sell our products so we can control what they do. Our reps can sell other products, if they are non-competing. We do limit how many other lines they can sell, but they are independent, so corporate management has less control of there time,” adds Herman. 

ISC Grew from Small Roots to National Independent Rep Company
Industrial Sales Corp. (ISC) in Westport, Conn., is an independent representative company that covers 42 states. Jim Hornung, president of Industrial Sales Corp., took the time to answer a few questions about how his father started the family business and how it continues to grow today.

Q: How did you get your start as an independent rep for the fenestration industry? 
A: My father started the business in 1979 after having great success in our industry and wrapping up his career as vice president of sales for the aluminum extrusion division of Capitol Products. 

Q: How is ISC different than other rep organizations? 
A: ISC has a national approach to our marketplace with great attention to detail on products, trends and strategies to best serve the fenestration market. We have distribution centers throughout the country as well as a technical center in Connecticut. The size and scale of our business produces a lot of benefits to our customers, suppliers and sales staff. We are able to service all customers, but we have a great advantage of being able to work with customers with multiple locations with one rep group. This gives greater consistency to the supplier and the fabricator.

Q: Why did you decide to expand your company to cover the entire country? 
A: We wanted continued growth and our suppliers and customers pushed us to expand. Our suppliers wanted us to work with them in more territories because of the successes we had with them in the past. Our customers wanted us to cover their corporate facility and their satellite manufacturing locations for continuity and centralized communication. We are always looking to expand and are always searching for new opportunities. 

Q: Where is your company most successful? Why? 
A: We do well in all geographic territories. One of the benefits to covering the country is that it can minimize risk in a particular geographic region or market segment. If new construction is off in the West, then remodeling may cover that downturn in the East. Certainly over the last five years we have had great growth in all of our territories.

Q: What qualities do you look for when hiring reps to work for you? 
A: We look for the same quality and values that our father started the business with—individuals with a good track record from within our industry and a very strong work ethic, coupled with our firm’s knowledge and support systems has created a good recipe for success.

Q: What do you look for in a principal and new line? 
A: How we view and select our principals over the years has not changed in a marketplace that has changed dramatically. First, we determine what potential products and lines we need to fill our voids. We also look at new technologies that will eventually gain acceptance in the market and suppliers who bring value added products and/or services. We are willing to take calculated risk on the launch of a new product or supplier. However, we feel very strongly that our values and goals our aligned exactly with our supplier. We have a long-term approach to our industry and we want the same dedication from our suppliers that we give to them.

Q: How important are the lines a rep sells? 
A: It’s everything to a manufacturer’s sales agency. One of our most important assets is the high quality of suppliers we represent in all our product categories.

Q: What is the biggest challenge you face in the daily operations of your company? 
A: Time management and communication. It is difficult at times to juggle many lines and communicate with all the parties involved. Over many years we have become very good at it and our investment in technology has helped tremendously, but it can still be a challenge. 

Q: How have the rising prices of travel expenses affected your company? 
A: The cost to run a salesforce today is huge. Travel, entertainment, insurance, workers comp, inside support staff and all other facets of expenses have risen dramatically in the last few years. Although the costs have increased, it just means we need to work harder and smarter to increase revenues. It also has presented some new opportunities for us. Many suppliers who have used company salespeople in the past are re-evaluating using a company sales force because of the financial benefits of paying a fixed commission percentage to an independent rep and not worrying about the expenses associated with a company salesperson. No one has a bigger incentive to sell than an independent rep. If we do not sell, we do not make money.

Q: With the housing market decline, have you had to adapt at all, make any changes to the way your company does business?
A: No. We do business the same way we have always done business and to some extent it does not matter if the market is up or down. We need to be in front of our customer making sales calls and bringing solutions and value to our customers. Nothing is more effective than a sales call and direct interaction with a customer.

Q: Do you sell imported products from any of your principals? 
A: Some of our suppliers import products and some manufacture domestically. Some do a combination of both domestic production and importing. Our suppliers do what is best for their markets, but in all cases they put quality first.

Q: How do you think independent reps will respond to the growing amount of fenestration products imported from China? 
A: Very well. Whether the products are made in North America, Europe or Asia, [manufacturers] need to select the best channel to the marketplace. We feel that rep firms will always be successful if they are a top-tier firm that provides a lot of value to suppliers and customers. 

Q: What do you hope to see for the future of ISC? 
A: We are a young, aggressive group and we plan on taking advantage of opportunities in a changing marketplace. We are excited for great growth with our suppliers and are always looking for new suppliers that can add value to our company.

Sarah Batcheler is a contributing writer for DWM and Penny Stacey is assistant editor for DWM.


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