Every IMDA member knows the importance of casting one�s lot with solid, dependable and reputable manufacturers. The following list of questions, developed by the Electronics Representatives Association and then modified by IMDA Legal Counsel Mitchell Kramer and President Dave Campbell, may help guide you in building the foundation for a good relationship.

History

• When was the company established?
• Are you a corporation, a partnership, or a sole proprietorship?
• If a corporation, are you publicly traded?
• Describe the organization and management of the company.
• What are your annual domestic sales?
• What is your last five years' sales growth rate?
• Who are your major competitors?
• What is your market share in the United States? In the territory being discussed?

Territories

• Which is the territory currently under review?
• How have you covered this territory in the past? Do you currently have representation in this area?
• If so, has your current representation been notified of your intentions to change?
• Why did you decide to change representation?
• Is this an exclusive territory? Do you have any house accounts?

Demonstration Policies

• Do you provide demonstrators or samples to the distributor or representative?
• Please describe terms and conditions.

Sales Support

• What do you offer (or plan to offer) in sales support to the field organization?

Training Policies

• How is initial training accomplished for distributors and reps?
• Please describe ongoing training.
• Do you conduct a national sales meeting? If so, how do you share expenses with distributors or reps who attend?

Commissions/margins

• What is the commission rate (if applicable)?
• When is it paid?
• What gross margin (if applicable) does the product offer?
• What happens to margins or commissions in light of national contracting or other forms of discounting?
• Do you have any direct compensation sales spiffs?

Equity Consideration

• Do you offer stock options or make stock available for distributors or representatives to purchase?

Representative/Principal Relationship

• Do you have a distributor or rep marketing advisory council?
• Do you have distributor/principal or rep/principal management meetings?

Advertising

• How do you advertise and promote your product (e.g., convention exhibits? magazine ads? direct mail)?
• Do you provide product literature?
• Do you routinely participate with your dealers and reps in funding regional trade shows?

Communications and eCommerce

• Do you have a website? What value do you feel it offers customers, as well as distributors or reps?
• Do you accept orders over your website? If so, is the distributor or rep compensated for shipments into his territory?

You might want to add some questions of your own to this list, or use some of the time spent with your prospective principal to discuss IMDA�s specimen specialty distribution contract.  Another useful document to discuss during your sit-down might be �Plain talk for better manufacturer/sales organization relationships�.