Road Warriors: Independent Reps in the 21st Century
Kathy Bender-Jones’ face lights up when one of her 11 manufacturer’s reps walk through the doors of Bender Music. She’s genuinely glad to see them.
“A good rep has our interests in mind,” Bender-Jones says. “They don’t try to sell us things just to be selling them. They don’t try to dump things on us. They look at our demographics.” She says the good reps make appointments, which allows her to organize it so that her staff is available for their visits. “We have a young staff, all in their early 20s, and my boys want to learn. They come in and educate us, and they are people you want to spend time with. One of our reps even brings cookies! And that can go a long way…” she laughs.
In addition to sometimes being bakers, “We’re friends, confidents, advisors, consultants, sales people,” says Tim Warren, president of The Marketeers.
And road reps have the endurance – and likely the stomachs – of long-haul truckers. Donn Nelson of Pro Media says his six-month old car already has 25,000 miles. “I’m on the road a lot,” he laughs.
But don’t ask for a ride: “Normally my SUV is so full of samples, there’s not even room for a passenger!” cracks Warren. From guitar picks to pro audio cabinets, it’s all he can do to save himself room for a cup holder for coffee and a bag for his trash.
How dynamic is the business? Warren is calling on pawnshops. “Who has money right now?” he asks (not so) rhetorically.
The advantages of these beasts of the byways are bountiful. “Independent reps can be at more places at the same time,” Jon Bosaw says. “The manufacturer doesn’t pay for their company benefits or their insurance, and the reps’ are only paid a percentage of what they are able to sell. That function and relationship hasn’t changed much. What has changed is how the customer thinks about products.”
The Process & the Politics
Adamson Systems, an Ontario-based pro audio speaker manufacturer has turned to an independent rep network to expand their existing presence in the U.S. They hired Bosaw as U.S. sales manager to do it. Prior to working for Adamson, Jon worked for EAW and knows the terrain.
“I’ve secured about half the reps we need so far,” he says, explaining that the U.S. is typically split up into 13 to 15 territories. “The hardest part is finding a rep who doesn’t have something else in his line that is in competition with Adamson. Since I worked at EAW, you’d think I’d first call EAW reps, but I didn’t because a rep wouldn’t want to jeopardize what they are already doing.” But Bosaw knows a lot of other reps – some have been easy to bring on, like Meyer Marketing, Florida.
As to how a company and an independent rep partner, Bosaw says it’s first up to the rep. “The thing is the rep knows his customers the best,” he says. “He travels the territories, and knows the dealers and who can be resistant to a certain product line, [etc.].”
Most talked about the sensitivity required for this job, as naturally the manufacturer wants as much attention as possible, and any slights, real or perceived, must be handled delicately. Also what constitutes a competing line can be in the eye of the beholder. Bosaw says that even though they may see that their high-end speakers could work side-by-side with speakers built for things other than arenas or big churches, that other manufacturer might not view it like that. Or, even a mic manufacturer might come up with an objection to their rep taking on a speaker line, on the basis that it will take up the rep’s bandwidth, and the competition is a retailer hearing about a speaker when he or she “should” be hearing about the mics.
“There are probably very few reps that don’t have lines that overlap in some way.” But a realistic appreciation of how the rep pays his bills is what is needed. “If you really think about it, the reason you have a rep is his contacts, and what is paying for him to go around with a new product in the beginning is the other products he carries.” If he goes around as a big-brand name rep, that big brand name is actually paying for his gas to get him to dealers to talk to him about whatever new brand he’s also talking about. He’s not making money on the new brands until he makes that big sale, and “so the sympathetic thing is to understand you have to exists with those other lines, and that’s beneficial to you. A lot of these reps have to be pretty spread out with many manufacturers in order to stay in business.” Some, especially because of the economy, have reached beyond the MI world and are representing AV/Security products. “You see a lot of these guys are going in and putting in conferencing systems, or cameras and lighting.”
Sensitivity on all levels is key. For Warren, every retailer is unique and has to be handled differently than another. “We try to find a way to deal with each individual customer that they are comfortable with.” There’s a connection because essentially it’s two independent businesspeople talking to one another. “We have a particular affection for the independent retailer, and we try to partner with them. I know that’s a term that’s thrown around a lot, but we try to really care about their business.”
“First, you have to have complimentary lines,” Ron Tunks says. But what that means is in the eyes of the beholder. Tunks of RTF Sales appreciates the client’s concerns, even if he doesn’t always agree with them. RTF represents PRS, Zoom, Samson, and Tycoon, among others. Until very recently, they represented Casio but then the opportunity to take Korg revealed itself. Casio chose to go elsewhere because they felt there was a conflict of interest.
Another example, ending differently: Fender would represent a clear conflict to their guitars like PRS – but not Fender’s Passport audio products. Fender’s people were only going into guitar shops, while RT Sales went into a wider array of stores, so they represented the Passport line in full line and non-guitar specific retail operations and in the first month put 20 new dealers into that line. “Peavey did the same thing. They have a divisional of architectural acoustic products, and their reps didn’t know about contractors who work on stadiums like we do, so we took on that and did well with it.”
Yesterday and Today
“It’s an ever-changing business,” says Nelson of Pro Media. “It’s different today then it was ten years ago – different then two years ago.” For example, he said he had just gone into a Best Buy, and “you wouldn’t have caught me near there five years ago!”
In the pre-cellphone/e-mail dark ages, Michael Austin of Marketing Concepts said he knew every hotel in his territory that had a great phone bank and a great bathroom. Calling card in hand, he’d pull over, belly up to one of the phone banks, and call into his answering service. Fast forward to today, and he says the instant communication tools makes the pace faster, and the business climate makes the commissions smaller, so he and his brethren have to hustle more.
Austin says he tells his coworkers to never assume anything, even in these trying times. “A lot of guys can find themselves assuming that a dealer isn’t going to be interested in something. You can’t do that.” He sites as an example the K&M Stands they rep. “They are higher end stand, but made in Germany, and are a little pricy.” While it might be deemed too expensive for a certain dealer, Austin points out that said dealer is also a Taylor Guitar retailer. “Those customers who buy those guitars are willing to spend $50 on a stand to protect it.” That retailer took them on, and is doing well with them.
“I find a lot of guys in this economy get afraid to ask for the sale, but you don’t know if you don’t ask.”
Another example is a Bass Emporium in Austin, Texas, an all-bass guitar store. “They adopted TC Electronic products early on when they had a $2,000 bass rig, and did well because it was still different and unique. It’s not for everybody, but then again, neither are Mercedes, and they aren’t going away in this economy either.” Now they do well with all TC products.
Tunks recalls that life in the early days was simple. He had no investment, and merely brought products to dealers, took them out to lunch, sold a few, and then “every night I’d get back to my hotel and add up commissions for the day to see if I made any money!”
Also, the idea of “merchandizing” was a bit foreign to most retailers back in the old days. “Basically there were guitars on the wall, amps on the floors, some hooks for accessories, a glass display, and posters on the wall.” Tunks says. “And there were very few pro shops.” But RT Sales grew, and he added more products, people, and territory. When the company hit the $1 million mark, he knew he was onto something. A few years ago, they hit $30 million. The recent recession pulled that number back a bit, though now that they are with Korg, he suspects “we’ll build some of that back.”
What has changed is the advent of chain stores. “I can’t go into them and sell them anything,” Tunks says. “Then there’s training and there’s a lot of turnover in those stores. Also the manufacturer will come up with POP and merchandising displays, but a lot of times they don’t get set up. Maybe they are slammed, so we end up going in and setting up displays. So there is a different need for them compared to an independent store, where you sit down with the buyer and writer up an order.”
Nelson says big boxes are a significant part of the business today, though the independent dealers that are left are the strongest of the pack. Those independents that haven’t survived in the last ten years usually were under capitalized in his view, and wouldn’t always have in stock what the customer was asking for. Another trend is the big boxes having their own house brands/private labels, which is changing the environment as well.
One thing that is not changing is the importance of that face-to-face time. “That’s key to our business,” Nelson says. “Whether its speakers or lights, it’s important to get into the door and show the retailer new products. When we do that, there’s always a positive response.” In his opinion, fewer dealers are going to trade shows – or if an MI retailer goes, he or she is taking two or three people with them instead of six or eight, so the independent rep getting into their door to show off new gear to all the employees is more important than ever.
Otherwise, how open a retailer is to new product depends on the individual dealer. “Even in slower times, most dealers know they need to get new products in their store, because customers are going to be asking about them. If they don’t have them in stock, they’ll lose the sale. Those things haven’t changed: People want what they want when they want it, so if something new comes out, the dealer needs to have it in inventory to get the sale.”
Pro Media is actually up this year in spite of the economy. Today the organization covers six states, but it’s complicated. They don’t carry every product in every state, because every agreement with every manufacturer has its own requirements and needs. “We’re unique because we do everything from entry-level lighting to Digico Consoles.” Training is more important then ever, and some retailers do it better then others. “We’re more than happy to spend as much time training as a retailer will let us, but hey, they are busy too. Sometimes its hard to give them the training that they need.”
With lighting there are other challenges too: “In a full line store, there may be only a couple of people interested in lighting, just like there are a few interested in guitars, and a few interested in amps [etc]. So you have to target people, and make sure you get to those who are going to be waiting in the customers interested in lighting and have them be able to answer their questions.”
Some things don’t change: “With independents especially, it’s still the 80/20 rule,” Nelson says. “80 percent of the business comes from 20 percent of dealers.”
Bender-Jones, whose Elkton, Maryland retail operation has been around since 1995, says that generally reps have “gotten a little more ruthless.” Also, there seems to be less of them visiting her. “I like that face to face. I like talking to someone in person and see them recommend something they obviously believe in, as opposed to some kid on a phone reading something his boss wrote up for him to say.”
The independent rep must embrace change, as do the dealers they serve. “The new ‘normal’ is not going to be the same as the old normal,” Warren says. “It’s a completely new world, and those who accept that are growing now.” He sites one of his clients, Guitar Gallery in Tuscaloosa, Ala., recently opened a second, bigger location. “There was an opportunity to do so, and they are doing great with products others might be scared to death to try. This is a testimonial to having a rep visit and convinces you to try something. It proved to them that there are still brands out there that are extremely profitable and desirable.” Guitar Gallery co-owner Scott Smith told Warren to bring him anything else he thinks The Guitar Gallery can “make this kind of profit on, and we’ll try it.”
Years ago Bosaw worked for Valley Audio in Nashville, and was a studio equipment provider dealing with Otari products. “When a customer was building a recording studio, we’d be the one that picked the brand that went in it. That’s all changed. Now the dealer has the ability to sell you practically any name brand. The customer now says I want a Yamaha hard disk recorder, Sennheiser mics, etc., and the dealer has to provide what the guy wants. So the job of the rep has changed in that he has to make sure that the product is being seen, and being asked for, by the customer.”
Becoming a Road Warrior
Nelson started playing in bands in high school, and then worked at Al Nalli Music in Ann Arbor. In 1980, one of the vendors needed help, and he moved into being a rep. In 1993, he founded Pro Media Marketing. Today he reps a wide-variety of products, including American D.J., Tascam, Crown, AKG, Pignose, and Whirlwind Pedals, among others.
Michael Austin started working sound for church in Lufkin, Texas, as a teenager, and when his minister, Glendon Sanders, started renting out sound gear, it grew into a little company taking Austin with it. By the time he was 24, he was a co-owner of the business. Reps would visit the small store, including Bruce Marlin of Marketing Concepts in 1984, and Austin was intrigued by the possibilities of that as a career. “I was attracted to it,” he says. “I liked them coming in, I liked talking to them, and I liked that they were the guys with the answers. But it was really hard to get a job as a rep. They typically hired older guys from larger markets, so I wasn’t really on the radar screen.”
Except for Marlin, who offered him a job. Reflecting on his early foray into the field in the 1980s, he says, “It was just a different time back then. Being a rep was being at the top of the heap. Today there’s a lot more rep firms, and probably more individuals doing it, guys basically working out of their car. And there’s lots more brands now.”
Marketing Concepts has gone through some changes, and today in addition to MI, they also rep for the Broadcast recording, theater, and video conferencing areas. For MI they focus on proaudio, including Adamson, and while in the past they’ve carried guitars, they’ve most recently been representing TC Electronics.
“About five years ago, they came in heavy with effect processors, and that was their foray into the MI world,” he says of TC Electronics. “Now they have a whole line of bass amps and combos that area really nice, plus a line of vintage pedals and vocal processors.”
Today Warren is president of The Marketeers, a firm that reps the likes of Hanson, Tanglewood, Blackstar, DBZ, Moog, and St. Louis Music products including Alvarez, Austin, and Knilling, among others. Like many he started in music retail in 1976 and in the 1980s managed A.B. Stephens Music, a small MI chain based in Huntsville, Ala. He was tempted away from the retail registers and worked for Kaman for six years, followed by a five-year stint at Fender.
He took a break from the business to tend to an ailing mother, and then when it was time to return to the business, he realized he had always wanted to own his own firm. “At the time it didn’t seem like a bad idea!” he laughs. The year? 2008.
Despite jumping in when the economy was falling off a cliff, he quickly established himself working with Mike Shellhammer of Morgan Hill Music/Boulder Creek Guitars. Today his full roster of products has allowed his company to grow 300 percent over last year.
“This summer we joined forces with another company, Rockin’ C Marketing,” he says. That company’s owner, Scott Cowen, is also a St. Louis Music alum. “We sat down and quickly realized if we joined forces, we’d have the opportunity to compete for some lines we might not be considered for otherwise.” The team has been able to double their territory, covering nearly a dozen southeast and southwest states plus Puerto Rico and the U.S. Virgin Islands.
A mere 41 years ago, when he was 20, Tunks of RTF Sales started a music store with a couple of band mates in Fort Lauderdale. “I’ve always been an entrepreneur,” he declares, explaining that in 1969 when he was playing local clubs, there was only one MI shop and the prices took advantage of the fact they were the only game in town. So by scrapping together some coins and getting a small loan from the drummer’s dad, they took their $1,800 and opened a shop. “We basically put our band equipment in it to make it look like we had more gear then we had,” he laughs. “If someone wanted to buy something that was ours, we just told them it was sold and then got them something similar!” The store was called Modern Music – and still exists. He recalls with pride that he sold Jaco Pastorius his first Acoustic 360 Bass Amp.
Yet a year later, he had an opportunity to play bass with a touring group and ten years later the rise of DJs made playing in the type of band he was playing less profitable and appealing. Recalling his dealings with reps when he was in retail, he thought it was a job he could do. “My first year out on the road, I only made $8,000,” he tells, but since he was still playing some gigs, it worked out.
But he made a name for himself as a guy who did well with hard-to-sell products, and started getting calls. His first big one was from G&L, and working with the likes of Leo Fender was a great experience. Unfortunately, the line never took off quite like he thought and flattened out for him after about two years.
Lately RTF Sales has been busy, and as evidence of the topsy-turvy world of an independent rep, they just took on Korg, newly divorced from Marshall. In marks a different direction for the venerable keyboard company, and Tunks and associates are looking forward to the work ahead. “Right now, there’s a lot of ramping up,” he said.
The Korg deal came about when in the process of reworking their business plan, hiring reps gave way to the advantages of independent reps. “It’s real simple: We pay all our own expenses, they pay commission only on what we sell.” Korg originally had one guy in four states, while RT Sales had seven in those states. “So when they introduce a new product, how long would it take one guy to get to all those stores versus what we can do with seven? Maybe he can open three dealers in one day if he’s lucky. But we could open 20 with our seven.”
People with the Answers
Manufacturers who go back and forth as to whether to use reps may want to take heed of what Bender-Jones has to say: “I know for a fact that we do more business with the reps we see then those that just call. We like those guys, too, but we can forget about [what they are selling]. It’s like, are you going to pay a bill you don’t receive,” or are you going to do business with the person who is right in front of you?
And it goes both ways, as she adds if she’s on the fence about an order but knows it’ll help one of her favorite reps to reach his goal, she’ll go through with it. And she looks to them on advice for merchandising and much more. Bender-Jones says the really great reps go so far as to suggest products that someone else reps (think Santa in Miracle on 34th Street). “And none of them are pushy.”
But while all those spoken to like their work, it doesn’t always like them. Reps can be beloved by a manufacturer on Tuesday, and then on Thursday be shown the door. Tim Warren started his firm The Marketeers with a company who he is not currently representing (though both are still on extremely good terms). “That’s the nature of being an independent rep,” he says. “Sometimes your contract is basically 30 days long. We all reserve the right to hire and fire each other for no particularly reason!” he laughs.
For Tunks, “I have no idea!” he answers to the question as to what makes him good at his job. “As a kid I would get excited about a movie, and retell it. I love to tell stories, and I love showing new products. Showing new products is a form of story telling.” Otherwise, he too enjoys the face-to-face he gets, but not always. “If you have someone new, and they think they know more than you … well, I don’t enjoy that! I’m here to help, but they have to be open to it.”
Warren is adamant about what he does. Some try to take pity on him, for starting a business at “the wrong time,” but “I can’t say yes to that. I believe that some opportunities that have presented themselves are because of the economic downturn. Many companies are relying on independents, companies like St. Louis Music. They have an internal staff, but also elected to go with independent reps. There are companies who are looking for ways to trim overhead right now, and we offer a solution to help them become lean and mean.” In addition, because of deals on hotels and restaurants, it allows them to pinch every penny and stay on the road as much as possible.
As to the retailers they serve: “People who have been through the tough times need our support. So we make sure they see all the latest stuff, and I work with them on displays and promotional ideas … then we talk about grandchildren,” he laughs, adding: “I still think that face-to-face time is still important. You just don’t get the level of trust and commitment without it. I believe the people who come out on the other side of this, those who embrace the technology, the video conferencing, but also maintain the face-to-face time with clients, are going to do well. I just want to help the industry.”
After all these years, Austin is still enjoying his gig. “I like being the guy with the answers,” he says. “I don’t want to sit and collect a check. It’s not in my DNA. I want to be the guy that earns it. I have always wanted to be one of the guys that made things happen.”