Bryan Shirley, CPMR, recently was named president and CEO of The Manufacturers’ Agents National Association (MANA), succeeding the retired Joe Miller. Shirley was previously the president/CEO of COLRUD-LOWERY, a manufacturers’ representative (M/R) firm in New Jersey engaged in selling electronic components.
He also has an extensive background as an educator and consultant to M/Rs. As a visiting professor at Arizona State University, he teaches Motivational Compensation for Outside Sales 201 for CPMR certification for the Manufacturers’ Representatives Educational Research Foundation (MRERF). Bryan is also a 1995 graduate of the CPMR program, as well as a past trustee and a Director Circle contributor to MRERF.
In its 60th year of operation, MANA is the largest M/R association in the U.S. with over 3,600 representative firms and around 1,400 manufacturer member companies. According to Shirley, its members span some 150 different commodity categories, although most members represent multiple product groups within those categories.
MANA also provides management services for AIM/R, the PHCP industry’s organization of independent M/Rs - one of three rep associations that MANA directly manages. This reporter interviewed Shirley in February about the issues facing reps in general and AIM/R members in particular.
SUPPLY HOUSE TIMES: What are the largest issues facing MANA's membership, and are they pretty similar to the ones facing AIM/R?Shirley:Generally, for all reps, one of the main issues they face today is the decentralization of customers. Our members sell to both OEMs and distribution channels, and especially in the industrial world we see many customers moving to China or having divisions in China. It’s getting hard to determine who and where is my customer today.
Consolidation of both the manufacturers we represent and the customers we sell to is another major issue impacting both MANA and AIM/R. I know the situation with Home Depot buying HD Supply has had an effect on many AIM/R members, for example.
There is also the cost issue that is impacting reps across the board. It falls into two buckets - declining commissions, coupled with the increased cost of running an M/R business. We don’t see commissions going up, but we sure do see travel expenses, healthcare and other costs rising fast.
Q: Are you planning any major changes or initiatives for MANA in the foreseeable future?Shirley:We’re exploring the possibility of having a MANA in China. Right now that will probably ruffle the feathers of some portion of our membership, but we’re not going to stick our heads in the sand and hope something like China goes away, because it’s not going to. So we need to understand it better and see where the opportunities lay.
Q: Has globalization been good or bad for M/Rs?Shirley:It’s brought threats and opportunities, and I think more opportunities than threats. Lots of companies around the world, not just in China, are interested in selling products in the U.S., but they just don’t know how. That’s why we’re looking at setting up in China. We also are working to establish a rep association in Mexico, and have been involved with an international organization of commercial agents and brokers. We also need to work with distributors and manufacturers in other countries.
Q: Is there a trend away from factory reps to independent M/Rs?Shirley:I think we continue to see it as unpredictable. It certainly seems that more manufacturers are looking to outsource sales because it’s the most cost-effective way to go to market. What’s interesting is that, historically, the decision to go from a rep force to a direct sales force also tended to be a money issue. Manufacturers would reach some plateau in sales volume, say $100 million or $200 million, where they think they can do it more effectively with a direct sales force and save money.
But it’s truly a myth, and I think more manufacturers are starting to see it that way. They recognize the increased costs of having more employees in terms of travel expenses, health benefits, office space and so on makes it hard to beat outsourcing sales for cost-effectiveness.
It’s also important to realize that whether factory or direct sales, there are good and bad reps in both categories.
Q: What are your impressions of AIM/R, and will MANA continue to manage AIM/R?Shirley:The answer to the second question is a definite yes. AIM/R is one of three rep associations we directly manage. We don’t actively solicit them. They have come to us asking us to manage their association, but I think we do it really well and downstream we may promote it more. We also are in the process of forming some vertical groups within MANA in particular product categories.
I’m much impressed with AIM/R, not only by their relationships with distributors and other customers, but also how hooked at the hip they are with manufacturers. I attended my first AIM/R board meeting last October, and was struck by how they devoted the whole afternoon to a session with their Manufacturer Advisory Council.
Their MAC is similar to what manufacturers do with reps. AIM/R invited six manufacturers to attend the meeting and the whole thing was wrapped around how M/Rs can work better with the manufacturers they represent. The give and take was very frank and helpful.
AIM/R also is unique in the rep world from a participation standpoint. The thing that impresses me is that there are about 320 member firms in AIM/R, and they’ll have over 230 people at their annual conference (Newport Beach, CA, April 18-21), which astonishes me. If I could get 10% of MANA members to attend our annual conference it would be a good turnout. AIM/R is a great group and the executive committee has some really good people in it. I really like them.
Q: What changes have you seen in the role of the M/R during your career?Shirley:There’s been a reduction in the number of rep firms. Just as with manufacturers, we’re seeing consolidation. I firmly believe it means there are fewer reps, but better reps.
We’re seeing reps really reaching for more education to increase their professionalism and image, and also doing more marketing. Those three things - education, professionalism and marketing - are pushing them to be more businessmen in sales than salesmen in business.