What does a manufacturers' rep do?
SSG MFG engineering5 min read
What does a manufacturers' representative do?
A manufacturers' representative is an independent sales agent who sells for several non-competing manufacturers, called principals, in a defined territory or market. The rep finds buyers, routes RFQs to the right principal, and manages the relationship through production. Principals pay a commission, typically 3–10% of invoiced sales depending on product type, and only on orders that ship. The buyer doesn't pay the rep.
What is a manufacturers' rep?
A manufacturers' rep is an outsourced sales force for manufacturers. The rep does not take title to goods, hold inventory, or resell product. The buyer places the order with the manufacturer, the manufacturer ships and invoices, and the rep earns a commission on the sale.
| Role | Takes title or holds stock | How paid | Works for |
|---|---|---|---|
| Manufacturers' rep | No | Commission from the principal | Several non-competing principals |
| Distributor | Yes | Margin on resale | Its own business; buys and resells |
| Direct salesperson | No | Salary plus bonus | One manufacturer |
| Sourcing agent or broker | Sometimes | Fee or markup, often paid by the buyer | Usually the buyer |
What does a rep do for buyers?
- One contact, several suppliers: one RFQ reaches the principals whose process, volume range, and certifications fit the part.
- Supplier knowledge: a rep knows which shops have capacity, what each is good at, and which ones are the wrong fit.
- Communication: quotes, questions, samples, and escalations run through someone accountable on both sides.
- Follow-through: reps are paid on repeat orders, so they have a reason to stay through production problems, not just the first PO.
- No direct fee: the principal pays the commission out of its selling cost, the same way it would pay a salesperson.
How does rep commission work?
Commission is a percentage of the net invoice value, usually excluding freight, taxes, and often tooling, on orders shipped to the rep's territory or accounts. It is typically paid monthly for the prior month's invoiced or paid orders. Rates depend on product type, order size, and how much selling effort the product needs.
| Product type | Typical commission | Notes |
|---|---|---|
| High-volume custom components: molded, stamped, cast parts | 3–6% | Large programs are often on a sliding scale |
| Machined, fabricated, and lower-volume custom parts | 5–10% | More quoting and engineering effort per dollar |
| Tooling: molds, dies, fixtures | 0–5% | Often reduced or excluded; agree up front |
| Electronic components | 3–7% | Split commissions with distribution are common |
| Industrial and capital equipment | 5–15% | Long sales cycles, high effort per order |
| Consumer products sold to retail | 10–15% | Higher effort per dollar of sales |
- Base: what the percentage applies to, such as net invoice excluding freight and tooling.
- Earned and paid: whether commission is earned at order, shipment, invoice, or customer payment, and the payment date each month.
- Split commissions: when a part is designed in one territory and bought in another, splits such as 50/50 or 60/40 are common.
- House accounts: accounts the principal keeps for itself, listed by name.
- Termination: notice period, commonly 30–90 days, and commission on orders after termination. Many US states have statutes on paying commissions owed after termination.
What is a line card?
A line card is the list of principals a rep represents and what each one makes. Good line cards are complementary: a rep carrying a molder, a stamper, a spring maker, and a die caster can quote most of a mechanical assembly. Lines should not compete with each other, so reps usually carry one principal per process and volume range.
- Complementary processes that show up on the same bill of materials
- Principals that serve similar customers and industries
- Coverage of different volume ranges, such as short-run and high-volume stamping
- Domestic and offshore options where buyers need both
How do rep territories work?
Territories are defined by geography (states or regions), by named accounts, or by industry. Exclusive territories are the norm, since a rep won't invest years in accounts another rep can take. Online RFQs blur territory lines, so modern agreements spell out how web-originated leads are credited.
Why are reps a variable cost for principals?
A direct salesperson costs salary, benefits, travel, and management whether or not orders come in. A rep costs nothing until an order ships, and then costs a fixed percentage of it. That makes reps the lower-risk way to cover new territories and industries.
| Annual territory sales | Direct salesperson at $180,000 fully loaded | Rep at 5% commission |
|---|---|---|
| $0 | $180,000 | $0 |
| $1,000,000 | $180,000 (18% of sales) | $50,000 (5%) |
| $3,600,000 | $180,000 (5%) | $180,000 (5%) |
| $6,000,000 | $180,000 (3%) | $300,000 (5%) |
Illustrative only; fully loaded direct sales cost varies widely by region and industry. Above the crossover point a direct hire can cost less per dollar of sales, which is why many principals use reps in some territories and direct sales in others. Reps also bring existing relationships, so coverage doesn't wait on a 6–12 month hire and ramp.
How does SSG Network work for independent reps?
SSG has worked as a manufacturers' rep firm for more than 25 years. SSG Network opens that model to independent reps, with the part builder, AI copilot, and principal matching behind every job.
- Join: start at /network with your territory, industries, and the processes your customers buy.
- Submit jobs: enter a customer's RFQ in the builder at /build for an instant budgetary estimate and DFM feedback, then send it for routing to matched principals for firm quotes.
- Find principals: find manufacturers to represent that fill gaps on your line card.
- Get paid: earn commission on the orders that ship. Confirm the rate and payment terms for each job in writing before you quote, as you would with any principal.
