FSMA Releases White Paper on: Why Agency Represented Sales Are More Cost‐Effective and Efficient Than Direct Sales
March 2019
The Foodservice Sales & Marketing Association( FSMA) has released a must-read, comprehensive industry White Paper, cosponsored by its FSMA Foundation and ASMC Foundation, comparing the economic differences of agency sales and direct sales. The study provides a unique calculation tool 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 percent of U. S. food service product volume) of agency sales is that they are significantly more cost-efficient and effective than direct sales. 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 sales agencies to perform activities much more cost-efficiently than direct sales, which have no such advantage because manufacturers cannot replicate the highly efficient syndication model.