Milestone Adds Manufacturer Reps

By: Carlton Purvis, Published on Jan 06, 2014

A number of prominent manufacturers, like Axis, Avigilon, Genetec and Milestone, use their own internal sales people rather than manufacturer representatives. Now, in a surprising move, Milestone is adding manufacturer representatives in North American. In this note, we share feedback from Milestone and our analysis of the significance of this move.

Milestone Feedback

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IPVM ********

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Comments (8)

"In their local territories, reps tend to know and be involved in lots of projects that would not make sense for a manufacturer employee to be dedicated towards."

That's true and I agree, IF you find a decent rep firm. I've known rep firms that didn't do squat but sit back and earn commissions on sales that had nothing to do with. I've also known firms that checked up on and supported us regulalry and were a real credit to the manufacturers they represented.

Out of curiosity, how do most rep firms work? Is it usually commission on sales on their territories?

Yes, and we've covered the good and bad of rep firms here.

My understanding is that rep firms typically get a percentage of total sales that occur in their geographical territory. I've heard 5 points, 7 points, etc. Distributors report back to manufacturers what sales occurred in what states and then the manufacturers tally that up for each of their rep firms.

So it's in a firms interest get out there and help drive up the sales numbers. But at the same time if the product almost "sells itself" due to market recognition and name brand, it's easy for them to sit on their laurels.

Can any manufacturers comment on how often they have to "fire" reps, or how do they measure the reps efforts? Do they look strictly at sales numbers and set quotas, or do you also make regular visits or require regular reports?

On the other hand, if a manufacturer is declining in the marketplace, life is very tough for reps. I mean, just ask Pelco's :-O

That said, manufacturers generally have the upper hand with their rep firms. Most are heavily dependent on 2 to 3 manufacturers for their company's financial fortune. Plus, rep agreements can typically be cancelled very quickly (in a matter of months). So the rep firm always face the risk of losing 20 - 50% of their company's revenue if the manufacturer is unhappy. It's one reason why I think being a rep firm is a hard life.

Rep firms get fired all the time, it's not really all that uncommon.

It can happen because they aren't performing well, because an employee of theirs that was considered the expert on a particular product left the company (so then the manufacturer decides the firm might not be able to do them justice), because another firm hired a key employee and the manufacturer wants to switch firms, or because the manufacturer hired or fired key sales people that have extremely good or bad relations with particular firms.

A good rep firm will submit some kind of report outlining their efforts and productivity on a weekly or monthly basis. You can also tell how good a firm is doing by how many meetings they set for your sales people (and the quality of those meetings), or how often their sales people contact your inside sales or tech support people for information or questions.

In many cases the reps are given quotas, where you would expect them to generate and close a certain amount of business on their own, without requiring heavy involvement from your direct sales force.

I have some experience in this area, having reppped for Dvtel, FLIR, and AD and Kantech to name a few. I think the business model is somewhat flawed because the manufacturer typically 'holds the keys' with a short term contract and high expectations. John is right, the Man Rep life is a tough one.

The question whether this is good or bad for Milestone is clearly 'yes' that it is. It will give them exposure to smaller projects and more sophisticated dealers. (more...sophisticated, not more sophisticated) It is the other manufacturers in the stable of the Rep Firm who will suffer because of the shifted 'mind share' of the reps. Milestone does not care, but it feeds the proliferation of a well worn path that the Rep Firm will eventually lose on one end while he succeeds on another.

The rep firm will have a hard time succeeding long term as long as this strategy continues, with the Manufacturer and the Rep Firm always chasing the greener grass.

Interestingly I was until recently the country manager for Milestone UK and Ireland. One if the key directors asked me if I could consider hiring a manufactuers rep for the UK to cut costs.This is not a usual approach in the UK.

When I spoke to a manufacturers rep and asked him what life was like. He said that its very tough and that he hates it. Only planning to do this before he gets a proper paid salary with a company that can look after him and offer job security.

So if this is the normal attitude of manufacturers reps then continuity of staff will change and installers stil buy from partners who they have a relationshiop with. So I think it is a poor idea.

Interestingly I was laid off by Milestone shortly afterwards. (after 7 years) so I guess it is a new global strategy they are working on. Also I guess it highlights that it is not necessarily any more secure being full time employed.

This is an interesting report. Though the information is outdated, it is telling of the psychology within the companies and within the industry. It's clear that camera and VMS manufacturers/developers are seeking a competitive and profitable balance of product development, meeting market demands, effective and profitable marketing, and establishing regular business for their target demographics. It's not been uncommon to see companies test the waters before diving in.

Later that year, they reversed the decision by terminating market reps. The interesting thing is that IPVM polls showed that a plurality of those polled saw the hiring of market reps as a good move for the manufacturer, while a plurality (later that same year) also agreed that firing the manufacturer reps was a "bad idea."


Consumers don't seem reluctant for their two cents, and their demands/opinions seem to be somewhat consistent.

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