Episode-2789- Starting a Rep Firm Business with John Davis — 6 Comments

  1. Anyone who is looking to start a business should consider being an independent Manufacturer’s Representative — even in a small start up way, or even as a side business. I was self employed in this capacity several decades ago, and was able to move quite easily in the market area I was involved in. Be aware that many great contracts involve selling to government agencies. And be aware that said agencies by law tend to favor minorities (including woman owned business), small business, and the like. For instance, the U.S. Army set aside contracts for small business. But there are many opportunities out there if you are reluctant or queasy to support the military-industrial complex, medical-industrial complex etc. There are also hoops to jump through regarding various government stipulated regulations regarding safety. A minimal technical science background is very useful. Suggest setting up as a corporation to minimize liability.

    In my experience, I found the buyer and set the price, and handled everything else. Either the manufacturer sent the goods to me or they dropped shipped. You can also do the same as an import-export business. The World is your oyster.

    • Some how in our world women who out number men are a minority and a actual privileged class at the same time. If you are married your wife can claim half your shit anyway. Set up your company so she owns 51% and you are majority woman owned business. When I ran an outside plant construction business we used this exact structure.

      This discussion by the way really slams the lid on so called white privileged males doesn’t it?

    • Let me add a funny story. One time I was doing a trade show in Ft. Worth and a Chamber of Commerce person came to our booth to tell me about the “minority business council” in the Ft. Worth Chamber. Asked me to join, support it, etc.

      I said you know may be you can help me, we are a minority owned business. She said oh, who is the majority owner looking around the booth are they here.

      My response, I hold 70% of the company its me.

      Confused – Um well uh, what minority are your.

      Me, I am a Ukrainian.

      Sir that is not a minority.

      Me, really what is.

      Well black, Hispanic, Asian.

      Me, and do you know people whom are black, Hispanic and Asian?

      Yes many of them.

      Me, so how many Ukrainians do you know, ever met one before.

      Well, um, see, um.

      Me, have a nice day we have customers to talk to and spent a lot of money to be here to see them today.

  2. Great episode BTW.

    I have worked at a technology Value Added Reseller (VAR) basically an MFG rep firm. Have since switched to the vendor side ever since, and as these tech are startups, we always struggle finding resellers that actually add value. 🙂

    So my $.02 input…

    1: You don’t have to be the outgoing sales rep type person to make money repping. The more technical, and probably introverted types, can join forces with the sales types. That’s what I do, variously called a Systems Engineer, Solutions Engineer, Solutions Architect, etc. The more honest label is Sales Engineer, or simply SE. The more technical and/or new a technology is, the more a sales rep needs an SE. The best SEs, IMO, are wolves in sheep’s clothing. They position to the customer as the technical expert and trusted advisor, or bringer of truth, compared to the sales rep. Classic good-cop vs bad-cop routine. SEs are also on commission, so winning is the goal, but they have to be correct/honest to preserve long term reputations. You can make good $$ as an SE. My wine cellar is, um, excessive kinda like what Jack mentioned. So much so I have to rent off-site storage. 🙂 Net-net, you can be a geek and still be an MFG rep!

    2: With the advent of “whatever-as-a-service” offerings and pure software startups, VARs don’t have to stock inventory, so capital outlay is much lower than traditional hardware “box pushers” of years past. New startups always struggle to get mindshare with the big VARs, they are selling millions/billions of the big MFGs products like HP, Dell, Cisco, etc. So why bother with a nobody and $100K’s of revenue? A smart move for a small VAR would be to approach startups with attractive tech, and offer to rep. Any smart startup will jump at the chance, and a good VAR can build a reputation of being startup friendly. The savviest of VARs do this, and even negotiate an equity stake (stock options) for taking on new startups. More than one revenue stream!

    To bring this full circle… Having worked with many VARs over the years, part of the value I bring a new startup is my relationships with VARs. If I bring some unknown startup tech to my VAR buddies, they know it is for real. The trusted advisor thing works 3 ways, customers, VARs/partners, and my new employer.

    The SE role is fun, flexible, and rewarding. All that travel, outings, expense account, etc. Jack talked about? SEs do that too, just not always to the extent of the sales reps. Our commission checks are smaller than the reps, but we also don’t have to do revenue forecast reports or take the full brunt of quota ownership. It’s a nice sweet spot that doesn’t work for everyone, but I enjoy it. YMMV