The ASMC Foundation is proud to announce the 2019 popular White Paper/Study, entitled Agency Sales or Direct Sales?, which found that Agency-represented sales are more cost-effective and efficient than Direct Sales. The Study is described under Publications. To download the 16-page Report in PDF format, click here. See below for highlights of the conclusions from the Report.
1. The Study provides a unique Sales Cost Analysis Tool developed to answer the age-old question of which sales method is the best for a Manufacturer. For more than 100 years, Agencies have been the primary go-to-market selling source. The chief reason for the overwhelming preponderance (70-75% of US foodservice product volume) of Agency sales is that they are significantly more cost-efficient and effective than Direct Sales.
2. The Study explains how Agencies are significantly more cost-efficient because they are able to spread the sales, marketing, and support costs (known as “syndication”) across the numerous clients they represent. This syndication ability of Agency services allows Brokers to perform activities much more cost-efficiently than Direct Sales, which have no such advantage because Manufacturers cannot replicate the highly efficient syndication model.
3. Furthermore, the White Paper describes how Agencies are compellingly more effective than Direct Sales because they are closest to the customers in their markets, with long-standing relationships and intimate market knowledge with all customer segments. The syndicated representation is favored by Buyers because it permits a more efficient interface than having to build relationships with hundreds of different Manufacturers.
4. While Agency services are often only associated with making customer sales calls, the Study reveals that there are many other critically important services performed by Agencies that are often ignored. The White Paper includes detailed identification of all the brokerage activities performed by syndicated Agencies in every market, without which services sales growth is nearly impossible for manufacturers to achieve choosing to sell directly.