For reps, there鈥檚 no such thing as a free sample. While ambassadors, athletes, and media get free products to test, independent agencies are responsible for ordering, paying for鈥攁nd offloading鈥攅very product they show.
鈥淔or one of my brands, I carry on average almost $40,000 a year in samples,鈥 said Andy Molter, founder of Brandywine River Reps, which serves New England and the Mid-Atlantic and represents brands like Eagle Creek and Chaco. Compare that $40,000 to a $70,000 commission on the same brand, and the stakes of recouping the cost of those samples at the end of the season are high if the agency wants to make payroll for its employees.
This is especially tricky this year, given that some reps footed sample bills before the coronavirus halted spring retail. For others, samples weren鈥檛 available to buy.
鈥淥ur facility was shut down before we could finish manufacturing them,鈥 said Wigwam sales director Brad Bates. He says production will restart soon, but predicts most brands will delay Spring launches to give retailers time to work through existing inventory. Other reps expect their brands to save Spring 鈥21 lines for Spring 鈥22, or to let them return unused samples for a refund.
Even in normal years, most brands have buy-back programs that let reps return samples of products that get dropped. But for most samples, it鈥檚 usually up to the rep to find a way to recoup costs.
Because sample prices are negotiated as part of every sales agency contract, they聽vary. On average, though, vendors give reps 20 to 50 percent off wholesale. That might sound like a pretty good deal, but it鈥檚 still 10 to 20 percent above 鈥渓anded cost,鈥 the bare-minimum dollar amount it takes to manufacture the final product.
It hasn鈥檛 always been this way. When Molter entered the outdoor industry 20 years ago, samples were often covered in the contract and provided at no cost to the rep. (In some industries, like housewares, that鈥檚 still the norm.) According to Molter, it鈥檚 only the last ten years or so that outdoor brands started charging reps a reduced wholesale cost. 鈥淲e鈥檝e become a profit center for a lot of these companies,鈥 said one rep, who preferred not to be named. 鈥淭hey look at us as a line item.鈥
Brands argue that pre-production sample runs are expensive, and the landed cost of a sample can actually be higher than that product鈥檚 in-season wholesale cost. Rather than profiting off the rep, the brand is simply sharing that loss.
Besides, says one in-house rep who asked to remain anonymous, selling discounted samples to agencies gives those agencies an opportunity to make extra profit.
That鈥檚 misleading, say the independent reps. Yes, they can offload samples through yard sales, consignment shops, or one-off deals with friends and family, but it鈥檚 not a good solution.
鈥淚 run sample sales out of my office for four weeks at the beginning of each season, but it鈥檚 cumbersome,鈥 Molter explained. 鈥淚t鈥檚 disruptive to the agency.鈥
Leta Kalfas, owner of Colorado-based agency MtnStuff, says she profits on some individual samples but always takes an overall loss. (On average, she鈥檚 able to recoup 70 to 80 percent of what she pays for samples each year.) For small agencies, or those with a lot of clients, those losses add up and deflate already slim margins.
Another issue with high sample pricing is that it makes it hard for reps to show dealers a rainbow set, versus a few samples and a bunch of swatches. That can harm the vendor, says Molter, especially with apparel, where being able to show off a jacket in all its colorways鈥攁n expensive proposition鈥攃an make or break a sale.
The solution? One rep says vendors should pony up and provide the sets for free. Another would like to see brands with retail spaces support reps by buying back samples and selling them there. Others suggest a more moderate fix.
鈥淚鈥檒l probably get daggers thrown at me for saying this, but I think the rep should have some skin in the game,鈥 said Kalfas. 鈥淚t鈥檚 our cost of doing business. However, I think we should get more help from the vendor [to bring sample prices down].鈥
Reps don鈥檛 expect a free handout, says Kalfas. But making samples a little cheaper would help reps give dealers the best showing possible, rather than just the best showing they can afford.
This story originally ran in the Summer 2020 issue of The Voice.