If you are new to the wholesale industry and want to import goods from overseas, you may want to take advantage of contracting with a manufacturer representative vs. hiring a sales force. A manufacturer’s representative is an independent sales agent who works on commission in your behalf. The terms manufacturer’s representative, rep, manufacturer’s broker and manufacturer’s agent are all used to describe sales agents who work independently on commission.

You don’t have to pay a salary to a manufacturer’s representative; rather, you pay them a percentage of the amount of goods they sell. If you are a small company or a startup, having a manufacturer’s rep gives you a practical, cost-effective option compared to hiring a direct sales force.

In North America alone, there are over half a million reps, and most of them sell goods to targeted markets in specific geographical regions. For instance, you can have a manufacturer’s representative buying ladies handbags for you in China. Reps know the local markets well because they call on local buyers regularly and have established good working relationships with them over the years.

Using a manufacturer’s reps can give your company many of the benefits of having a satellite office in a location such as China, which includes knowledge of the local markets and immediate access to large accounts without your incurring large fixed costs.

When using a manufacturer’s representative, your costs are always a fixed percentage of sales. The only drawback is that agents typically handle many different products. Some can be complementary to yours, while others may be in competition to your product line. Typically, a manufacturer’s rep will earn a 5 percent commission on sales, although this amount can vary widely depending on the product, market and sales volume.

For more information about manufacturers’ reps, go to the Manufacturers’ Agents National Association website, and/or read the article, “The ABCs of Importing Goods into the U.S.“ on TopTenWholesale News.