Tuesday, November 8, 2011


Manufacturers (vendors) sell their products, often using sales reps, to retailers (buyers).  Vendors may also exhibit at trade shows attended by buyers; and today, they will find it essential to have their own website.

Vendors hire sales representatives to go out and call on retail buyers.  The reps write orders for the vendor, send the orders to the vendor, and the vendor ships the orders to the retailers.  Sales reps often cover a specific territory, e.g. the state of Iowa.

The retailer pays the vendor for the order, and the vendor pays the sales rep a commission (15% is the standard in the giftware industry).  For example, if the order shipped to the retailer totals $100 (not including shipping and handling), the vendor pays the rep $15.00.

Wholesale pricing is different than retail pricing (the price paid by a consumer).  For example, if the retail store sells your item for 9.99, they are usually doubling what they paid the vendor for the item, e.g. it would be $5.00.  Vendors may also offer discounts on large orders.  In those, cases, the rep commission may also be discounted.

The best resource for vendors to learn the wholesale side of the business is right in their backyard - a retail store that would like carry their products.  Vendors should make contact and meet with with the buyer (retailer), show their product line, and ask for advice from the buyer regarding representation.

Vendors need to be very careful in this business not to let consumers go around their retailers, i.e. by selling to consumers at the same price that you sell to retailers.  That's a big no-no.  In cases where a vendor has its own website, it's important to keep the wholesale and retail sides clearly delineated, often with a registration and login required for the wholesale side.

The whole purpose of GreatRep.com is provide an online venue for vendors, sales reps and buyers to interact and conduct business that provides immediate benefit to everyone.  Registration is free at Greatrep.com for Vendors, Buyers and Sales Reps.

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