Inside Lighting’s late-August roundup of agent appointments ran to 105 new manufacturer partnerships. One Dallas agency added fifteen manufacturers in a single entry. Nobody publishes the lines those agencies turned down. Yet that is where a rep agency line card shows its discipline.
Every agency owner knows the call behind those announcements. A factory has an open territory. The product is decent. The rate is better than decent. The regional manager wants paperwork before quarter end. There’s no hire and no check to write. It feels like found money.
It is not. A new line is paid for in the one currency an agency can’t print: time in front of specifiers, distributors, and contractors.
The rep model rests on an agency selling the products of multiple, non-competing manufacturers within defined territories. Selling capacity in that model is finite, and signing a new principal creates none. Unless the agency has genuine unused capacity, the new line takes hours that its existing principals, the manufacturers it already represents, believe they’re paying for.
The Door Is Cheaper Than the Room
In When Enough Is Enough, MAG offered five questions for reviewing the lines an agency already carries. This piece is about the decision that comes first. That decision matters more.
A line is far easier to decline than to resign. Resigning means notice periods, orphaned specifications, projects in flight, and a factory scrambling for coverage.
The channel does review its line cards. Egret Consulting Group’s 2019 survey of lighting reps, reported by Egret founder Ted Konnerth, found that 85% review their line cards annually, and 87% resign non-performing lines voluntarily. The industry has built real discipline around the line card. The better question is whether it applies the same discipline before a line ever gets onto it.
What a New Line Actually Costs
The missionary-line guidance NEMRA adapted from ERA and MANA is blunt. It’s not uncommon to make 10 or more sales calls to land a new customer, and the first commission on a missionary line can take as long as two years.
Its conclusion belongs on every agency owner’s desk: cutting existing principals’ selling time or mind share to pioneer another line is not cost effective.
Inside time
The cost lands on the inside team first. Konnerth described the work of converting a project quote that carries 60 or 70 manufacturers into separate purchase orders as extensive, well-compensated labor. That work includes pricing strategy for overage and follow-up on order status, ship dates, and submittal dates. Egret found that big lighting agencies already run 1.76 support staff per outside salesperson.
A new line adds another price book, another quote format, another submittal package, and another commission statement to reconcile. Egret also reported that commission payments can lag for months. The carrying cost starts on signing day. The income starts much later.
Outside time
Outside time is priced just as clearly. Egret’s survey put average commission income per salesperson at big firms at $670,000, against a fully loaded cost of roughly $180,000. That’s about $3.70 in commission for every dollar the salesperson costs. Every hour spent on a new line comes out of that yield.
The new line doesn’t borrow time from the agency. It borrows time from the principals already paying the agency.
Start With the Contracts You Already Signed
Read your existing agreements before you read the new one. In Inside Lighting’s 2022 survey of 23 lighting agency principals, reps reported that some larger brands require permission before an agent adds a line that may compete. That’s effectively a veto. Whether it’s fair is a separate argument. The practical point: a new line can put your largest contract in play.
Then read the new agreement for how it ends, not how it starts. Look hard at four things:
- The term. Konnerth noted contract lengths ranging from 30-day “standard” agreements to more than five years. Egret put the median long-term agreement at about three years for big and mid-sized firms.
- Spec protection after termination. Agents in the Inside Lighting survey argued specs need 18 months of protection, because sales and construction cycles run that long. Specs are the asset the agency built, and defending them starts in the contract.
- House accounts. Which customers are carved out, and can that list grow?
- A sale of the company. What happens to your agreement if the manufacturer is acquired?
Read both documents with counsel, not with the regional manager.
Do the Contribution Math Before You Sign
The method is old and underused. The NAFEM–MAFSI line profitability guide, written for foodservice reps but directly portable, has everyone in the agency estimate their time by line. The agency then allocates expenses in proportion to that time and compares the result to commission.
Co-author Joe Yore adds the step most agencies skip: a properly interviewed prospective principal can be plugged into the same matrix for a profitability read before the line is signed.
Yore also warned agency owners running the analysis that they may find as many as 50 to 75 percent of their lines unprofitable. If agencies make that discovery after signing, why aren’t they running the same arithmetic before?
The number that matters
MAG takes the analysis one step further. A line can be profitable on its own and still dilute the agency. The test is net contribution:
Net contribution = expected commission − direct cost of carrying the line − what those same hours earn on existing lines today
If the hours assigned to the new line produce less than they produce elsewhere on the card, the agency has gone backward, even while the line’s own column shows a profit. Put a month on the break-even point. If nobody can name the month, the agency is guessing.
Verify the inputs
Verify the expected commission; don’t accept it. In a MANA discussion of line analysis, one rep described two manufacturers that claimed considerable business in the territory. Due diligence showed little or none. Another rep calls other agencies carrying the line before deciding.
The screening factors in that same MANA discussion belong alongside the math. Former MANA CEO Charles Cohon asks whether the line:
- Is a door opener that generates future leads
- Prices competitively
- Quotes quickly
- Delivers quality product on time
- Pays commission on time
- Is free of house accounts
A line can be profitable on its own and still make the agency poorer.
Five Questions to Ask Before You Add to Your Rep Agency Line Card
- The contract question. What do my existing agreements say about adding this line, and what does the new agreement say about ending it? If either answer is unclear, the answer is not yet.
- The territory-truth question. What business actually exists here today, and why is the territory open? Verify it with distributors and with agencies that carry the line elsewhere, not with the factory’s forecast.
- The contribution question. What does this line earn per selling hour, net of what those hours earn today, and in which month does it break even? Stress-test missionary lines against a scenario where the first meaningful commission takes up to two years to arrive. The associations’ own guidance says that can happen.
- The champion question. Who owns this line, by name, and which of that person’s current lines gives up time? It’s the same test When Enough Is Enough applies to existing lines, run before the signature instead of after.
- The pull-through question. Will the customers already on your call schedule make time for this line, or does it need new doors? A line that rides existing calls costs less to establish. A line that needs its own calls is a new business.
The Wrong Reasons to Say Yes
“If we don’t take it, our competitor will.” In Egret’s survey, about 24% of lighting reps said they will take a line to keep it from a competitor. That’s defensive shelving. It blocks competition; it isn’t representation. As one MANA member put it, it’s not ethical to keep a line unless you rep them faithfully.
“It doesn’t cost us anything.” Filler lines carry a hidden price. The MAFSI guide warns they can cost a rep access to larger principals selling the same products, because those principals assume the rep won’t give up an established line. The cheapest line on the card can block the best line you never got.
“The factory says the business is already here.” That’s a claim, not a finding. Verify it before it becomes your forecast.
“The commission rate is great.” A rate is a price, not an income. A rich rate on a missionary line doesn’t fix the timing problem when the first meaningful commission may be two years away.
“We need to replace the income we just lost.” This is the most dangerous reason, because urgency can substitute for diligence. The income disappeared today; a missionary line may not replace it for 18 to 24 months. Losing a line can free capacity for another, but that doesn’t make the next available line the right one.
“The regional manager is a friend.” You’re signing with a company, not a person. Agents in the Inside Lighting survey cited terminations driven by a new regional manager’s ties to a rival rep across town.
“It came with the acquisition.” Inherited lines deserve the same test as new ones. Covering C&O Sales’ acquisition of the Meglio Lighting St. Louis business, Inside Lighting noted that agency deals rarely transfer a line card intact, and overlapping manufacturers may land elsewhere. Deal logic is not representation logic.
The Case for Saying Yes
The counterargument deserves its full weight. Multi-name specifications reward carrying two or three of the named manufacturers. That’s strategic redundancy, and it’s defensible. Pioneering lines sometimes become majors; the MAFSI authors call that kind of line a comer. Consolidation rewards scale. An agency that never says yes stops growing.
All true. The difference is that a good yes survives the five questions. For a missionary line, a good yes also comes with shared risk. The NEMRA guidelines lay out several options, including:
- A market development fee for a set period
- A minimum monthly commission, with a minimum term and extended post-termination commission
- A higher commission rate during startup
A factory that won’t share any of the pioneering cost is asking the agency’s existing principals to fund its market entry.
Manufacturers should read this the same way. The agency that asks these questions before signing is the agency worth having, and the one most likely to show up ready for joint business planning once the ink is dry. The one that signs without asking makes the same casual promise to everyone.
Every Line Is a Promise
Every line on a rep agency line card is a promise of selling time, and the supply is fixed. The review conversation is about promises already made. The signing conversation is the only moment an agency can decline a promise it can’t keep, at no cost to anyone.
Before the next signature, name the principal whose hours will pay for the new line. If you can’t name one, don’t sign.
