Manufacturers' representative

In practice

SSG is an independent manufacturers' representation firm with more than 25 years of representing principals that make service and production parts for OEMs.

Related terms

Principal

A principal is a manufacturer that contracts a manufacturers' representative to sell its products or capabilities in a territory. The principal quotes, builds, ships, and invoices the parts, and it pays the rep commission on sales. A rep firm's principals make up its line card.

Line card

A line card is the list of principals, or manufacturers, that a manufacturers' representative sells for, usually with each principal's processes and capabilities. Buyers use it to see which sources a rep can bring to an RFQ. Reps generally avoid carrying directly competing lines.

Commission

Commission is the percentage of invoiced sales a principal pays a manufacturers' representative for business the rep develops and services in a territory. Rates vary by industry, product, and deal size. Commission is usually paid monthly or quarterly after the customer pays the principal.

Territory

A territory is the geographic area, customer list, or market a manufacturers' representative is contracted to cover for a principal. Commission is typically paid on orders shipped to or placed from the territory. Clear territory lines prevent split-commission disputes.