On Sep 24-25, 2009, Peter Zafiro and I ran a workshop on behalf of Manufacturers Agents National Association (MANA) in Chicago. The workshop is called Building A Successful (Independent) Representative Network. Typically companies attending the program are companies that are growing and need more sales; are entering a new market; or are not growing and have had to lay off their direct sales force in lieu of hiring an independent, straight commission sales force.

We have run this program twice a year on behalf of MANA since 2003. The usual attendance for this event is about 15 to 20 manufacturers. This year the average attendance has been close to 40 for each of the two events- double the normal attendance. When you consider that this program is now going through its first recessionary period, perhaps that in itself is an indicator. Realizing this, we added one question to our anonymous attendee demographic survey conducted at the beginning of the program. In addition to the demographic questions asked below, we asked about projected revenues for 2010.

There is some fairly interesting- and telling- information about the state of the economy of these attending manufacturers from this survey. A total of 39 attendees representing 34 manufacturers attended. The countries where these manufacturers have their corporate headquarters and principle manufacturing facilities are: (30) United States; (2) Canada; (1) Mexico: (1) China Note that not all of the people complete the survey, and that not all of the surveys are completely filled in- this is not required information or course material. Consequently, there is not a one-to-one relationship of the data throughout the survey results. Here are the results of the survey for your review:

1. Company size:
The vast majority of the companies were small manufacturers.
a. Under $5 million: 9
b. $5-25 million: 14
c. $25-100 million: 2
d. Over $100 million: 3

2. Position:
This program, “Successful Sales Rep Network Development” is a high profile priority for these businesses.
a. Entrepreneur: 1
b. CEO/ Pres: 5
c. Exec Sales Mgr: 12
d. Regional Mgr: 2

3. Reason for attending:
While several are looking to get more performance (straight commission) for their sales dollar, many are looking for quick sales growth due to immediate opportunities via an experienced rep network. Still other companies are looking to enter new markets to mitigate their narrow market economic dependence.
a. Transitioning from direct to independent rep sales force: 9
b. Growing needs require hiring sales: 14
c. New market entry: 7

4. Typical order size:
While most of the typical orders from customers are relatively small, twelve were over $10k each, and five of those companies say their typical order size was over $50k, indicating typically a major purchase by OEMs or an investment in a manufacturing process line.
a. Under $1K: 4
b. $1K to $10K: 14
c. $10K to $50K: 7
d. Over $50K: 5

5. Typical Customer type:
The vast majority of customers for the attendees are OEM’s. An assumption could be made that these attendee manufacturers- all relatively small- are feeding products some larger OEM fish, who in turn are looking up forecast-wise.
a. Original Equipment Manufacturer: 19
b. Distributor: 9 Value-added reseller: 2
c. End user: 5
d. Contractor: 3
e. Retail: 0

6. PROJECTED SALES 2010
This statistic wraps up all the other statistics- as well as the assumption that anyone attending this program is, for the most part going to grow. Those that are not growing are probably eliminating the overhead of a direct sales force or scrambling to get into some new markets because their current market is in an economic abyss.
a. UP OVER 10%: 10
b. UP 5 TO 10%: 6
c. -4% TO +4%: 3
d. DOWN 5% TO 10%: 2
e. DOWN OVER 10%: 2

Economically, this is a small group of small manufacturers. However, the fact of the matter is- and has been for every recession recovery since 1981- small business is where the economy will recover from. Small business has created the largest number of new jobs in every recession recovery and expansion since 1981.