An Open Letter From Mike Reed to Independent Sales Reps
Independent coatings sales reps are becoming something of a dying breed in industrial coatings these days. As a few companies rise to global standing, they are becoming increasingly obsessed with preserving margins on the sales side in order to compensate for the astronomical overheads required to maintain a shiny, global brand. Meanwhile, talented independent salespeople– each with their own stuffed Rolodexes (or a modern equivalent), industry expertise and entrepreneurial spirit– are being pushed to the side or absorbed into low-paying positions with almost non-existent sales incentives.
The Current Model
In place of the independent sales model, a few different strategies are emerging. National and international coatings giants are making efforts to formally bring independent salespeople into their employ, choosing to not provide commissions that make a salesperson a living commensurate with their talents.
Still other coatings manufacturers are, and have been for some time, erecting brick and mortar locations in their operational areas and having dealers work from these shops alongside the armies of employees that man the shops. It has the same effect of reducing or eliminating commissions for sales and, I suspect, removing any incentive for above-and-beyond salesmanship.
This distribution model is still practiced on a much smaller scale by independent sales reps, but more and more large manufacturers are pulling their products from these reps to keep from having to divvy up margins. The products still being sold by independent reps now tend to come more from niche manufacturers.
Perhaps this is part of a larger movement in the United States and elsewhere, where all possible efforts are made to concentrate profits at the summit of the organizational pyramid. Major industrial coatings brands are now confident enough in the esteem of their global brand that they no longer invest much on the sales side. They let their product’s labels do their selling for them.
An Alternative Model
It is possible, even still, to find another mode of operation (and full disclosure, this is the one that I have always envisioned for my own business). This model is based on nimble, responsive salesmanship. It is a global network, without the overseas offices. It is a web of talented, independent salespeople with their own contacts, experience and incentive to sell.
The independent sales model keeps all of the manufacturing capabilities without the overhead that comes with putting the brand name above everything else. And lower operating costs free up space for higher commissions. Higher commissions in turn attract a more driven, talented sales force.
There may be fewer and fewer players in industrial coatings who operate by this model, but that just means a deeper talent pool. For these companies, locating seasoned independent salespeople represents the biggest challenge and the biggest opportunity to challenge established industry megabrands.
The independent salesperson may be an endangered species, but for emerging coatings companies, they represent a mutually beneficial opportunity to seriously grow sales volume.