By Mike Root, President of Furniture Sales of Mid-America, a furniture wholesale company in the Midwest and Rocky Mountain states.

Over the last several decades, the demise of the independent factory sales person has always been rumored. It has concerned forward-thinking reps over the past 50 years.

First came Levitz and the big box furniture stores. They were going to take over the landscape of the furniture world and negate the need of sales reps. My father and his generation had to sell around these guys who would drop stores in a marketplace and screw up distribution patterns. The worry always was they were going to run the independent furniture store out of business, and thereby run the reps out of business. But of course, by and large that model fell apart when among other reasons they couldn't figure out how to take consistent merchandising nationwide. By trying to go factory direct or having a national salaried factory agent, they lost the insights of the boots-on-the-street and their merchandising made no sense for certain regions of the country.

Next came the rise of the independent regional furniture store. Again, as I was learning the business, I was concerned what it would mean if one of my factories could not sell a Top 100. Would factories go direct? Well some did, but many still trust their representation to the local commissioned sales representative. They understand the customer and the market better than someone who is responsible for hundreds of accounts. They know the people, they know what product will work for their markets and customers, and they know the factory quirks. So when all communication fails, the independent sales rep can step into the void and get things moving in the right direction. Or more appropriately, for which the sales reps get little credit, the rep does such a good job that things flow smoothly and problems get solved before anyone knows there’s an issue. A good rep has been an important cog in the distribution chain.

A recent Wall Street Journal article entitled “Shift to Web Hits Factory Middlemen” talks about the fashion industry reps who work from China to major retailers like Target. As consumers increase their online shopping, it squeezes retailer’s margins, which then are passed backward down the chain so that factories and reps get squeezed as well. Granted this is a different business because they speak of a publicly traded middleman who saw their earnings drop more than 50%, down to $72 million. Now I would love to have a $72 million bottom line, but I certainly would not be pleased with a 50% decline in earnings. In response, this company is adding more services, factory inspections, etc., in order to stay relevant.

So, as we prepare for market, what is your take on the rise of e-commerce in the furniture industry as it pertains to sales reps? Certainly over time marginal retailers will not survive, therefore reducing the number of potential customers to which sales reps have the opportunity to sell. But my father has always said, and I truly believe and run our business as though, we work for both the factory and the retailer. What ideas can good reps employ to better their factories’ business and that of their retail customers? As always, leave your positive comments below.

(Source: Furniture Today)