Arecont Cuts 4 Rep Firms

Been in the industry for over 30 years, I've never seen this as a successful move

Interesting conversation. I have worked for a number of Rep firms and hired and fired them over the years in other industries.  Reps are coin-operated, so you get what you pay for, just the same as a direct hire. But, in most cases, you gain a talent pool you wouldn't otherwise have the ability to afford. John, as you said, reps are good for going after the mass market approach, but truthfully, the better reps go after both mass market and large accounts. The best ones shift back and fourth based on each lines' needs and what market demands are for a particular line. In most cases, Reps are commission only, so it takes some stones to be a rep. They tend to be top 20% sales producers.  

The best seasoned reps know far more than direct hires about the market and how your organization is viewed internally and external throughout the industry. If you are not getting what you want out of your rep, you need only ask them why.  Just be sure to set your ego aside and actually hear what's being said. You will most likely be very surprised about what you learn in regards to growing your business sales and efficiencies.

Arecont has been trying to get someone to buy them for the last three years.

There are two reasons behind this move.

1. By having a large sales team, it adds to the overall valuation of the line. No one buying an organization can feel comfortable about having a sales team on a 30 day renewal contract.

2. Short term cost savings

Paying a Rep. organization 5-8% of total revenue monthly (average Rep rates) is much more costly than slowly hiring junior reps under there existing regional managers. This savings will go straight to the bottom line which leads to a more favorable sales price.

This is a good short term move if Arecont can sell the company in the next year. After that, it will kill there pipeline. There booth at ISC and ASIS will dressed to sell:)