How Lighting Reps Are Weathering the Storm

A continuation of last month’s report, more independent sales reps reveal how the economy has affected their operations.

I want to thank you all for your many positive comments on the present day position of our reps’ lot in lighting.  The drama of the unfolding changes in our country, our world, our lives, and our economy has greatly affected us all in many ways.

I thought it was important to see it from all aspects of our chosen industry and that the reps needed a voice, too.  Evidently the vast majority of you agreed.  I think we should all respect the bravery of these guys and gals who have stuck their necks out to share their honest opinions and current conditions with us.  They are the folks in the middle who are blamed from all sides when anything goes wrong!  Their job is so much harder and involved than you would ever know.  All that pressure and living on 30 days’ notice!

A change in sales management usually means major changes in the rep ranks.  Only a handful of factories have realized over the years that it’s not the solution. Here again, are some more candid opinions and observations of our lighting brethren.

 

“The lighting industry is slowly coming out of the worst four years of my more than 30 years in the industry. We have lost manufacturers and have seen consolidation. Plus, we’ve had the growth of the Internet, the big box stores getting more aggressive, and fewer lighting showrooms.  All of this has had an adverse effect on reps. I feel we will see gradual improvement over the next few years, but the really great years are still many years away.

“As an agency, we are trying to diversify our package. We can no longer be only lighting reps. One of the things we’ve had to do is cut costs. As such, we have had to let go of a number of employees and have analyzed all of our expenses.  We have also tried to expand our package into other areas.

“As for the future, I think the industry is headed into many years of slow growth.  Both manufacturers and distributors are carrying less inventory, which makes fulfilling orders harder and causes lost sales. We need to control costs, take care of our dealers, diversify our product lines, and keep a positive attitude.”

Dennis Kahn
Kahn-Schohl Sales
Milwaukee, WI

 

“Keeping expenses realistic is one of the hardest things to keep under control. Booking rooms in advance to get good deals and staying in lesser hotel chains helps a little as does driving a smaller car and packing it better.

“With the number of pure lighting showrooms on the wane, I believe that

it has become important to consider different channels and product mixes. After all, we are manufacturer representatives first and lighting men second. If it is saleable, then sell it. Does it really matter if it is a showroom or a catalog house or an electrical supply house or a farm supply center? If they have a way to sell what you have, then go for it! You might just be surprised where it can lead you. It

doesn’t mean that you reduce your time on lighting, because you already have; there are just not as many customers as there once was.“Work with your factories as well. We have been able to put together programs just for our market that make sense to the manufacturer and probably will not work in any other territory. However, if you do not ask, you will not get.”

 

― Anonymous

Midwest

“The industry is going through considerable change and you must be able to adapt to survive. If you cannot, then you might want to consider another industry.  In my opinion, it will be at least two or three more years before things settle down.

“There is a ton of cross-merchandising by many retailers going on, which makes it that much more difficult for the showroom that only focuses on retail lighting customers. To remain profitable in the long run, many of the crazy programs will have to come to an end (i.e. year dating, free shipping, buy backs). This encourages mediocrity from the showrooms since they know they have a form of ‘insurance’ by relying on these things instead of buying smarter and selling smarter.  Who benefits?

“I’m trying not to put too many eggs in one basket as a rep. This means that you need more customers and manufacturers within reason. Look at the different industries that complement lighting; they seem to be holding their own.  Smart showrooms are becoming ‘design centers’ and offering other items such as furniture and accessories.Never close a door and always leave the opportunity open to go back to something if offered. I think there should be more emphasis on prospecting the light commercial/specification business and hotel management companies.

“Since the industry is in a downturn from the housing market, other avenues have to be looked at.  Sometimes saying no to a customer opens up other opportunities because it forces you to look elsewhere for business. This is especially true since the lighting industry has created a monster that it cannot control.  It is the only industry that I can think of that demands free merchandise from suppliers or 50 percent off on displays, returns with no restocking charge, low prepaid or free shipping, and then not paying within terms.  Who really benefits from this type of model?

“Offer ways to help a customer other than product knowledge seminars and suggest additional ways to market such as social media and walking them through the process.

“When quoting, always submit a package price versus an individual breakdown, this way it is more difficult for your bid to be broken up by price if a competitor is given your quote.

“I think the industry has become very competitive. Companies like Home Depot and Lowes can offer the identical product (we all know they buy from the same factories in China, but in much bigger numbers) at a fraction of the price.  Lighting showrooms have to get out of the mentality of buying low to medium end product because they simply will not be able to compete with the buying power of the box stores, period.  In addition, IMAP policies must be enforced and kept high enough so that margins are maintained.

“The lighting industry and ALA might want to pair up with the furniture industry and become a more powerful industry to lobby government. Both industries really cater to the independent retailer and could benefit from each other’s knowledge and practices.  Some agencies might have to combine forces to be competitive – and this is especially true in underserviced areas where it might make more sense for another agency to cover.

“The manufacturers have been giving in to showrooms’ demands, which has made it difficult since now there are competing programs from large companies that offer year dating and free shipping if you do a certain volume.  This puts pressure on the various manufacturers and depletes profit. In my opinion, this is the reason some manufacturers have started cutting commission rates; they have to stay competitive since they are giving away so much.

“I think e-commerce will gain in popularity as the current generation likes their smartphones and will purchase more [products] on them. This puts added pressure on those that do not currently sell on the Internet and may force competitors to have similar polices in order to compete.

“My advice to other reps is to maintain the ability to switch on the fly. This will allow you to work faster and more efficiently and perhaps get more recognition from your manufacturers and showrooms. Think outside the box in respect to the type of customer you are calling on, and look for other avenues to sell.

“I think showrooms need to go out after the business instead of waiting for customers to come to them. They used to employ outside salespeople, but this is hardly done now. I also think manufacturers need to be on top of design trends and quality control so they can jump ahead of the box stores. They have to carry better inventories if they want the business since the customer at all levels is impatient.

“Finally, in these tough times, instead of trying to sell the customers something, try and identify what they want. Stop and listen to their needs or problems.  This makes the selling process quicker and makes you more valuable to your customer. In this regard, a customer’s problem then turns into you selling them your product or solution rather than simply trying to stock their warehouse.

“I think there needs to be change. We need to have a long-term sustainable industry out there that is able to compete and I think too many are afraid to speak up and voice their concerns.”

Brett
Harris
Norlite

Toronto

 

“We are still in a changing world. With the Internet, lower builder sales, stagnate retail, and the considerable consolidation of showrooms, it is a real challenge to survive today.

“In regards to the future, I have to plan on what will sustain me and my family and what I will need to do to be able to retire within the next 10 years. Again, this a real challenge.

“In order to make my business work in this market, I’ve had to cut back on expenses and consolidate lines to focus on my core lines and accounts. We can no longer rely on the long-term relationships that were the spearhead of this industry, which is sad. In order to sustain and grow business, reps now have to drive all sales. We can no longer just get our products placed and hope that those products sell. We have to be the go-to agency for product knowledge, drive every sale, and then service the hell out of our customers.

“I feel there will always be a need for showrooms to properly educate and sell lighting, but decorative goods will not sustain a rep agency. Reps now need system-type products that answer specific lighting needs and cannot be sold without solid product knowledge.

“My advice to my fellow reps is to focus on new technology (i.e. LED) while you still have the advantage of knowledge over price. Partner with other channels to create the need for your products so that you can have some control over what your distributors choose to carry. You can no longer say ‘Isn’t this a pretty fixture?’ and have your relationship-driven business be successful. Those days are long gone.

 

Michael Graves
Alliance LLC
Maryland

“PLAIN AND SIMPLE: the rep is the root of all evil.  The manufacturer/importer does nothing wrong.  The rep wants money for making sales which the manufacturer /importer does not want to pay.  If the market goes in the toilet, it is the reps fault and he has created it.  If a manufacturer/importer can’t ship, it’s the rep’s fault that he did not anticipate the need.

After 40 years of being in this racket, I still can’t wait every morning to get out there and blow somebody’s mind.  And most importantly remember that we are all still standing THANK GOD!

Alex Gaspar

XXXXX

East Coast

________________________________________________

I want to thank our brothers and sisters in the repping profession who have given freely of their time and effort to share their thoughts and expertise with us.

There were many areas that I felt were beyond the scope of this endeavor and didn’t touch on in the body of this article, but felt they were worth mentioning.

Modern times and technology have given birth to the “Mega-Agency.”  It is almost impossible for an independent rep to operate alone today.  Costs have skyrocketed, modern equipment and technology have forced the rep to be available 24/7, plus the working day has greatly expanded as the world has shrunk and we operate through multiple time zones.

Mandatory show attendance has placed a great burden on the cost of operation for a rep agency.  It’s not so long ago that the factories provided for on-site national sales meetings and the inherent costs.  Obviously, that’s no longer the case.  This has brought up the question of multiple shows in the same venue when only one is heavily attended and includes a vast majority of the yearly purchases.

Commissions have continued to slide downward as factories have to offer extended terms, free merchandise, promotions, and deeper discounts.  The rep is expected to share in all that.  The confusion over customer classifications, inter-state chains, brick and mortar, cyber dealers, and increasing “house accounts” have not helped the reps income or ability to help the distribution of product in their territory.

The changes are as fast as a hurricane and no one can predict when the storm surge will recede.  One fact should be self-evident though, not unlike a striking hurricane, we all need to work together to survive.

The Changing Role of Lighting Reps





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