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NEMRA’s Rep of the Future Study Highlights Concerns over Rep Compensation Programs

Feb. 6, 2020
The study revealed new rep concerns about the 30-day contracts that many manufacturers use with independent reps.

NEMRA’s annual conference last week at Orlando’s World Center was a blur for the many independent reps and electrical manufacturers who juggled dozens of group and one-on-one meetings and the various social and networking opportunities at the conference. While Electrical Wholesaling has not yet confirmed the final attendance figures, it certainly seemed like one of the busiest conferences ever for the National Electrical Manufacturers’ Representatives Association (NEMRA), Portsmouth, NH.

One of the highlights of this year’s conference was the release of some of the findings of the association’s “Rep of the Future” study, which explored the changes that NEMRA reps and manufacturers, as well as electrical distributors, see in the role of the rep over the next few years. David Gordon’s Channel Marketing Group, Raleigh, NC, which conducted the study, got insights from more than 700 reps, manufacturers and distributors.

The study revealed new rep concerns about the 30-day contracts that many manufacturers use with independent reps. While these contracts have been an issue with NEMRA reps for many years, the rep respondents in the survey said it’s tough to build a business with a manufacturer when it’s possible they could lose the revenue of the line products with just 30 days notice. It’s harder than ever, the reps said, because manufacturers expect a bigger share of their selling time to generate specifications for their products, while often working with commissions that they feel don’t adequately compensate them for this additional work. NEMRA President Jim Johnson said one solution to this issue may be compensation programs that utilize a combination of commissions and fee-based services that compensate reps for additional services rendered such as specifications and take-offs. Said Johnson during a business session at his first NEMRA as president, “Compensation for reps will have to be more than just commission. Fee-based services will have to be considered.”

Another hot topic at this year’s meeting were the moves by 3M and Fluke to eliminate their rep sales forces and to instead utilize factory rep sales forces in some regional markets. One North Carolina rep for Fluke reportedly first found out that Fluke was making the move when someone sent him a Fluke job posting for a regional salesperson covering his territory.

Next year’s NEMRA Conference will be back in Orlando, Feb. 2-6, 2021.