Point of Sale… Profits Lost?
As a manufacturer’s rep, do you know how much incorrect or un-submitted distributor point of sale (POS) data cost you in time and lost commissions?
Distributors, did you know that if manufacturers’ reps do not feel they are compensated on sales through your RDCs that they may direct business to another distributor?
Manufacturers, is it important to you that your manufacturer’s reps are compensated based upon what is sold in their territory?
In 2014 NEMRA commissioned Channel Marketing Group to gather insights on the current state of POS. The findings, published in The State of POS in 2014, revealed that
• inadequate POS policies and administration cost electrical manufacturers’ reps commissions and productivity
• there is an administrative burden for manufacturers who may also be incorrectly compensating their sales organizations
• ineffective or inaccurate POS reporting may result in lost sales for some distributors, especially national chains, who lose field support from reps who redirect business to distributors for whom they know they will be compensated
And while POS reporting is better than it was 10 years ago, there is an opportunity for companies to do much better.
The impact of POS reporting is expanding due to industry consolidation, an increase in the number of distributor central/regional distribution centres and distributor geographic expansion. Effective policies and standardized formats can ensure that all parties are equitably compensated, administrative systems are improved, organizational initiatives supported, and sales information can be mined to support future business development.
These issues have combined to make it more difficult to determine what products are sold from, and within, a specific sales territory, thereby impacting sales organization compensation. Given that over 80% of industry suppliers go to market through independent sales representatives and these manufacturers represent in excess of an estimated 60% of industry sales, this is a major issue for the industry.
This state of POS report was commissioned to gain greater industry insight into the importance of POS throughout the channel, to understand and uncover POS issues, and to suggest a path forward. Specific research relating to POS reporting for “commodity ” products, especially in product categories such as wire, pipe and conduit was also conducted as this is a significant concern to a number of independents sales agencies.
Through e-surveys, interviews and a meeting with NEMRA’s Manufacturer Group, over 260 individuals provided input into the report. Eleven percent (11%) of manufacturers’ representative responses came from Canadian manufacturer representatives and represented 26% of NEMRA’s Canadian membership. Over 85% of reporting manufacturers sold to distributors in Canada. Canadian issues and insights mirrored U.S. feedback.
The report details the research findings. Suggestions to maintain visibility on this issue and improvement for all parties were provided to NEMRA.
To receive a full copy of The State of POS in 2014, contact NEMRA at nemra@nemra.org or call NEMRA headquarters (www.nemra.org).
David Gordon is president of Channel Marketing Group. Channel Marketing Group helps manufacturers and distributors accelerate sales generation and gain insights through channel strategy, marketing planning and market research initiatives. He can be reached at 919.488.8635 or dgordon@channelmkt.com.
