Artist Rep

[Terry Curtis]

I was approached at a recent wholesale show by a couple of people who want to discuss representing me. Pros and cons from anyone who has done this? After a long 4 day wholesale show plus setup and breakdown, I would love to turn the marketing over to someone else and spend time on "my art". I'm starting my research on this and would love any feedback about your experiences.

thanks
terry curtis

[Kopperwood]

Since I've spend parts of the last 2 years developing a business plan around creating a rep agency,among other services, I guess you could say it is a deal worth considering. Of course it will depend on whether they are good at what they do. It will also depend on the scope of what they are taking off your plate, ie are they also supplying business management, accounting, engineering, administrative, etc services.

One thing that you shouldn't be concerned about is paying their fee. If you take your TOTAL cost of doing your recent wholesale show (be sure to include your cost of being away from producing), and divide it by the sales you made, convert to a percentage, there is a real good chance that cost of sale percentage is greater than their fee. In other words you are already paying the fee, probably more, to keep your business going. (I'm currently developing a more detailed calculation to explain this, but you get the basic idea).

I could go on and on about this, but since no one else has replied to this post, I guess there is little interest and we wouldn't want to bore anyone. PM me if you think I can help you with your research.

Perry

[Marty]

There's reps and there's reps. Get references and check them. You want to ask about samples (how many are needed and who pays for them and whether you get them back), territories (how big, how many shops they service and how often they visit or call them, minimums, "house" accounts- if you already have accounts in their areas who takes care of them and do the reps get paid for them regardless), fees (what percentage do they get of your wholesale order totals- used to be 15%, if they rep you at shows do they expect you to cover a percentage of their expenses, if they pick up a catalog for you are you still bound by the original fee or is it sliding or negotiable). How much exposure will they give you at the big shows (so you don't have to do them yourself)?
When will you get paid, who handles slow paying shops and collections and how- does the rep fee come off the top, with the order, or when you get paid?
Can you turn out enough work to justify a rep's service?
Get references, don't lock into long contracts.

[Terry Curtis]

Thanks Marty. Debbie and I had a few reps stop by to talk with us at the show this week. I am definitely concerned about some of the issues you outline here. After 10+ hour days at the show this week, the thought of paying someone to do this sounds wonderful but I need some distance from that so I can put the pros/cons in perspective.

My biggest concerns are representation area, whether they want some type of exclusivity (and how do they define it), and the full scope of their services for the cost. Your point on short term contract goes along with a PM I got on what are the rules of dis-engagement. Nothing will be done until my lawyer reviews it but this information is great

[Tom Fuhrman]

I worked as a manufacturer's rep for many years. there are lots of advantages and disadvantages to using them for your sales and marketing. be aware that you have to be able to produce multiple products that you only get paid about 42% of what it sells for retail. you get 50% of retail and then must pay the rep 15% of that. You must have items that the rep can sell in mass. Unless they can write an order for at least $1000, it doesn't pay for them to even make a sales call these days. If you can find some that can get you into some decent catalogs then that is very good. As a rep, calling on customers to make sales is very expensive in this day and age. If the rep can't make at least a $500/month off of the commissions from your sales they will normally not push your goods very hard. When selling with reps you will need to start selling based on being paid in 30-90 days as that is the norm for a lot of retail stores. be prepared to carry those accounts over those periods of time. Don't pay the reps till you get paid.
It can be a good way to go but it has a lot of pitfalls if you are not careful. Be prepared to have to give up existing accounts to the reps if they are calling on them and servicing them unless there is something in writing that both parties agree to as you keeping those accounts as house accounts or just pay the rep a nominal % on those.
If you need more info, call me and I'll be happy to answer any questions for you pertaining to dealing with reps.

[Terry Curtis]

Thanks Tom. This gives me a lot more to think about. If I go forward with this, the contract is going to be critical. I definitely don't want to give up existing accounts.