Should Manufacturers Be Concerned? Reps Overjoyed?

When I titled this, I really wanted to say “Should Manufacturers Be Concerned? Reps Overjoyed? The Future of Distribution” but David told me it was too long and would not be good as a title, so … But I think our industry is coming to a crossroads based. Let me explain.

Years ago, our rep agency changed from a known manufacturer of mostly commodities to one not nearly as recognized. Our logic was accurate and too long to review here, but for one week the regional sales manager and VP of Sales traveled with our salespeople visiting our distributors in 5 states, literally from morning to night. When the week was over, we had converted every single distributor from our previous manufacturer to our current one as the distributors had never seen a single representative from the previous manufacturer.

A few years later, our regional manager retired, and a few of us from his region proposed to the VP of Sales to omit hiring a replacement and consider allocating his total expense equally among the reps in his region. Each rep committed to hiring a specialist to promote the manufacturer’s more profitable products directly to end users with monthly reports on calls and progress. The VP cited the calls we had made years prior as to why he needed a DM in the field, rejecting our proposal.

He hired a regional manager who was supposed to be in each territory regularly. It didn’t happen. He didn’t have relationships; he didn’t have product knowledge and in speaking with the reps the feeling was “nice guy but doesn’t add value.” None were overly motivated to promote the more profitable products, let alone do the paperwork. Our overall business flourished with the manufacturer, but on the core products.

The past few months I have had contact with over 30 distributor people in various states asking questions about their relationships with both manufacturers and their representatives. A few months ago, I did the same with various contractors in different states. Both efforts were on behalf of Channel Marketing Group clients. The resulting thoughts would shock the founders of NEMRA. I know as I am one of the few originals left from that group.

A major manufacturer’s sales managers told me they felt sales was no longer a participant in their company’s planning management sessions. They observed that their company was seemingly operating under the management of either IT people, production managers or operational bosses with sales merely being able to address margins and sales figures. They summarized that sales had little voice in the present or future direction of the company. For another project I spoke to regional managers from a number of manufacturers, randomly chosen (CMG identified some, I reached out to reps for other recommendations) and overwhelming they felt that Sales management was not a decision-driver in their company and seemingly did not have a voice at the table. They were advised that their input was confidential and not for a project for their company. This was the opposite for other companies … but you know who those companies are because they are always referred to as “quality” companies” and “easy to do business with.”

Channel Marketing Group’s most recent surveys to distributors and contractors, mostly for clients, confirm the results.

In one area, 16 distributor managers were surveyed. The question was if they would change manufacturers should their current representative lose a line and pick up a replacement, only one said “no.”

Consider … this means that the alignment, presuming the ability (i.e., no authorization needed, and comparable product and the customers did not have brand allegiance) was to the rep.

Each said they had little to no contact with a manufacturer and that representatives had become a more consistent and offer far better services to them than their manufacturers. The majority also cited “trust” and longtime relationships with their reps and rep principals. They said 40 minute or less meetings at NAED or other venues a few times a year (and now I understand there are less meetings and less people attending the meetings) versus selling, marketing, and planning with their local representatives just could not compare.

Contractors agreed completely in nearly every instance. They further stated that since COVID, when many shortages were created, and still exist, they have far more flexibility in substituting manufacturers. Many said they no longer have to justify many of those product substitutions or share savings when doing so.

Another statement by both distributors and contractors, they don’t see people anymore.

Few new products and saving methods are being introduced to them and very limited sales meetings are initiated, and less that have value, which make the valuable ones difficult to discern!  Yes, they admit that some companies continue to reach out virtually, but each preferred in person, and growing relationships. As a result, distributors and contractors, when asked, felt exactly what Chuck Steiner (the dynamic owner of Branch Electric in Maryland before he sold to Rexel, and a forefather of IMARK Group) related to me early in my industry learnings that quality, knowledgeable and timely inside people are far more important to them than the majority of outside sales. Unfortunately, this dependency on inside sales has a history of lower profits and fewer sales of newer and more innovative products.

The feedback by many contractors interviewed has been they desire a more direct relationship with reps as they depend on them for new product information, sometimes for any information, and in some cases, this has led them to also receive pricing from them.

This leads to findings in the 2020 Rep of the Future report (and if you haven’t read it, contact Sue Todd. It is available to everyone within an NEMRA manufacturer or rep.)  and is amplified in the 2025 report. (Email David for a copy of the presentation shared at NEMRA 2025.) Manufacturers are expecting reps to spend more time at end-users / contractors (it’s in the Manufacturer of the Future Report … contact Sue for a copy, and if you are a distributor or a non-NEMRA member and want an executive summary, contact David) and those reps who are viewed as “top” are focusing their efforts here. It also correlates to the rate of distributor consolidation as well as outside sales turnover which is based upon generational change and performance.

This is a major criterion for a manufacturer in their selection of representatives. In the coming years it will determine distribution channel partners (and even perhaps the level of support they receive from a manufacturer). It also drives contractor support.

From a manufacturer viewpoint, is the manufacturer merely selling production capacity, and hence needing a distributor to be a service outlet, or does the distributor support development of brand preference and product specification? If distributors in a market are not brand / product proponents, the rep needs to be for the manufacturer, and manufacturers should think how their compensation models can support this. If you are a manufacturer, which should you fund more … sales / demand generation or order servicing and fulfillment? Which is harder?

Ours still can be a relationship business no matter how diligently we try to make it not so. Perhaps we need to market our companies as to our internal capabilities, going back to a process many have allowed to wane: SELLING TOGETHER DETERMINED BY MUTUAL NEEDS! Perhaps distributors should embrace localized planning and joint sales calls rather than viewing local locations as customer fulfillment centers? This is how independent distributors differentiated themselves but with their being less of them, the nationals can seem like commodities to contractors.

If you want ideas on how to strengthen allegiances and better market to channel partners (manufacturer to reps, distributors to reps, manufacturer to distributors, etc) or gain insights on your path to market), reach out to me and David and I will connect with you.