Hank Bergson, former president and CEO of the National Electrical Manufacturers Representatives Association (NEMRA), recently contributed an article to Bill Attardi’s EnergyWatch on the topic of overage in the lighting industry.
Bergson believes it serves a useful function in the industry, allowing sales reps to recover their full costs, and sees the answer being higher commissions:
To me the answer to overage is rather simple. “Overage exists because manufacturers allow it to exist”. Peculiar to the lighting specification business most manufacturers feel that the commission earned by their independent sales representatives is adequate compensation for the time, effort, expense and sales expertise that goes into securing a lighting package specification and holding that specification thru delivery, installation, and payment. Frankly nothing could be further from the truth, the hard and soft costs borne by the independent lighting representative frequently far exceed their commissions. Thus, the need to recover those costs and receive a profit for their efforts. Most manufacturers have no clue what the Independent Representative has to do to “get the order” and furthermore they don’t want to know, they just want the order!
Couple with this the fact that some manufacturers encourage overage because they share in the overage dollars if they are billed as part of the cost of the product by splitting by some percentage the overage with the representative.
Want to get rid of overage? Raise the commissions!”
Click here to read the full article.
