Case Study: The Silent Sales Killer—How Rep Firms’ Revenue Dependencies Determine Which Brands Win
Background: The Illusion of Equal Representation
Manufacturers often assume that when they hire a rep firm, their brand will receive consistent sales effort alongside the other brands the firm represents. In reality, this is rarely the case.
In the AV industry, most independent rep firms juggle multiple manufacturers, each with their own product lines and priorities. Smaller brands often accept that they won’t receive the same level of attention as the firm’s biggest accounts—but what many don’t realize is just how wide that gap truly is.
The Problem: Revenue Dictates Sales Focus, Not Manufacturer Priorities
Because rep firms operate on commission-based earnings, their financial survival depends on keeping their largest revenue source happy. This means:
The top-revenue manufacturer gets the majority of sales effort—often without realizing the extent of their dominance.
Smaller brands assume they’re getting at least some share of attention, but in reality, they’re often only mentioned when it’s convenient for the larger deals.
Reps may only push a smaller brand when it aligns with a larger deal involving the anchor brand, rather than actively selling it on its own merits.
For example:
Suppose a rep firm generates 60% of its revenue from a large speaker manufacturer and also represents a smaller amplifier brand.
The reps will prioritize speaker sales first, only pitching the amplifiers when necessary to close a speaker deal—even if the amplifier brand has a competitive offering.
The amplifier manufacturer assumes reps are working to grow their brand, but in reality, their product is an afterthought unless it helps land a bigger speaker order.
The Missed Opportunity: How Manufacturers Lose Deals Without Realizing It
Smaller manufacturers never get the sales push they expect, leading to stagnant growth.
Market feedback becomes distorted—a brand might believe its products aren’t resonating, when in fact, they’re simply not being actively sold.
Manufacturers mistakenly assume poor performance is a product or marketing issue, when it’s really a rep firm prioritization problem.
What Could Have Been Done Differently?
Shifting to an inside sales model: A direct sales team would have ensured that all products received consistent attention, rather than being deprioritized based on commission structure.
Reevaluating commission structures: Some manufacturers attempt to combat this issue by offering higher commissions on lower-priority products, but this rarely works long-term. Reps still default to the simplest path to a sale, which often revolves around the largest revenue source.
Setting clear sales expectations with rep firms: While not a perfect solution, manufacturers could have implemented quarterly performance reviews and set specific sales activity benchmarks to ensure their brand was being actively promoted.
Key Takeaway
Smaller manufacturers know they aren’t getting the same attention as the rep firm’s biggest accounts, but they often underestimate just how little effort is actually being put into their brand. This misalignment leads to missed opportunities, misleading sales data, and lost deals. The best way to solve this problem? Move sales in-house, ensuring direct control over product prioritization and customer engagement.
