Definition: An independent sales agent who works on commission

Manufacturer's representative or rep, manufacturer's broker and manufacturer's agent are all terms used to describe independent sales agents who work on commission. You don't pay them a salary, just a percentage of what they sell. Manufacturer's reps offer a practical, cost-effective alternative to a direct sales force for many growing companies. There are more than half a million reps in North America, most selling to targeted markets in select geographic regions. Reps know their markets well because they call on local buyers regularly and have established sound working relationships with them.

Using manufacturer's reps can provide you with many of the benefits of having a satellite office in the location--including knowledge of local markets and rapid access to large accounts--without your incurring large fixed costs. With reps, sales costs are always a fixed percentage of sales. The downside is that reps typically handle many different products. Some may be complementary to yours; others may compete. A typical manufacturer's rep earns a 5-percent commission on sales, although that amount varies widely depending on the product, market and sales volume.

If you're interested in learning more about manufacturer's reps, contact the Manufacturers' Agents National Association.