October 2010

IHRA
REPorter
No more juice!
by Steve Grossman, CPMR
GM Partners
IHRA Founding President and Delegate to MRERF
I
got two replies last month regarding my last article, both from seasoned reps who experienced similar changes over the last
20 plus years. Both agreed that the business is tougher than ever, and the only way retailers seem to know how to make more $$$$ is to ask
the supplier or rep to give them more dollars. Well, I going to go out on a limb here and shout: “There are no more $$$$ to give.”
Instead of finding out better ways to attract customers thru innovative ideas, most retailers feel they can continue to squeeze other people’s
profitability. It does not matter how hard and how many times you squeeze an orange, eventually, there is no more juice!
Two examples that come to mind:
Years ago I represented a full-line broom and brush line, which is now out of business. That industry got into the practice of buying back other
suppliers’ goods, replacing the inventory with their own and offering better pricing. Kellogg/Ecko Cleaning, Empire, O’Ceder (in/out of bankruptcy)
and others paid the price of trying to meet the retailer’s demands of lower prices. Libman and Quickie survived but the industry lost a lot of good
competition.
Continued on page 3 >>>>
Principal lacking good faith commits
a breach of the Peace (Bridge)
Gerald Newman
by Gerald M. Newman and Adam J. Glazer
Schoenberg Finkel Newman & Rosenberg, LLC
IHRA Legal Counsel
A
meron International produces fabricated steel products. Its sales rep in Western New York, West Empire Associates, learned that the Buffalo
and Fort Erie Peace Bridge Authority, operator of the famed Peace Bridge (connecting the U.S. and Canada), was considering re-coating
the entire bridge. West Empire quickly arranged a meeting between Ameron and the Authority.
West Empire then worked the phones for a few months with the Authority and Ameron, but did not otherwise assist in the preparation of Ameron’s
proposal for the Peace Bridge project. Shortly after participating in the initial testing of Ameron’s bridge coating, Ameron terminated West Empire
as its rep.
The coating test was then successfully completed, and a feasibility study regarding
October 2010
re-coating the entire bridge was commissioned. West Empire was not involved in
Tech Bits .............................................................. Page 3 - 4 this study. Months after West Empire’s termination, Ameron formally presented its
One (1) Line Available............................................... Page 5 feasibility study, and the Authority then solicited bids for the project. West Empire did
Continued on page 2 >>>>
Industry Show Calendar............................................ Page 8
International Housewares Representatives Association
Field Sales Professionals Serving the Home • Housewares • Gourmet • Hardware Industries
Page 1
Newman (continued from page 1)
not participate in Ameron’s bid submission.
The Authority opted to conduct a $2.5 million pilot project to further test the re-coating, and Ameron bid on this without the assistance of West
Empire. This $2.5 million contract was awarded to Ameron, which later also received the contract for the remainder of the bridge, a deal worth over
$19.5 million. West Empire was not involved in the negotiations for the pilot project or the completion of the bridge re-coating.
West Empire’s rep contract provided for payment of commissions on all sales of products into its territory out of funds actually received by Ameron. Yet, West Empire received no commission based on the Ameron policy that only those representing Ameron at the time the payment is due
qualified for commissions. West Empire was terminated before even the pilot project deal was signed.
This led West Empire to file suit against Ameron in Buffalo federal court. The suit alleged a breach of contract for failing to pay the commissions,
and added that West Empire was terminated in an effort to renege on its commission obligation in breach of the “implied covenant of good faith and
fair dealing” that is written into virtually every contract.
While Ameron enjoyed the unlimited power to terminate West Empire as its manufacturer’s rep, which termination was not challenged by West
Empire, the law did not permit Ameron to use the termination as a means to deny the commission. Even when a principal’s right to terminate a rep
is unrestricted, it may not do so in bad faith as a mere excuse to avoid paying a commission.
The court noted that West Empire had done everything required to earn the commission prior to its termination. Under Ameron’s interpretation of
the contract, it could willfully injure West Empire by terminating after it had fully performed its obligations, but before Ameron was paid by the Authority. Indeed, Ameron’s approach might tempt any principal to terminate a rep who successfully lands a big sale before payment arrives to avoid
the commission obligation. Fortunately, this approach was rejected by the court as inconsistent with the parties’ intentions when they entered their
contract.
The court found “it is unreasonable to conclude that they intended to enter into an agreement whereby plaintiffs could fully perform all of their requirements to earn an incentive but that defendant could then unilaterally avoid paying such simply by terminating” before the Authority’s payment
arrived. Payment was due when West Empire had performed its end of the bargain, and this right was only subject to divestment if Ameron was
not ultimately awarded the bridge re-coating work.
West Empire also argued that it was entitled to its commission as the “procuring cause” of Ameron’s contract with the Authority. The procuring
cause doctrine varies state to state, and in New York generally entitles a sales rep retained by a manufacturer to get paid commissions on sales it
makes “either directly, or as its efficient and producing cause.” The doctrine ordinarily applies even after a contract has been terminated, unless
the contract contains specific language limiting or excluding this right. Ameron’s contract did not contain such limiting language. Instead, Ameron argued that West Empire was not the procuring cause of the business
because its involvement ended well before the Peace Bridge contract was signed. The court, however, recognized that a rep need not be involved
in the completion of the sale or even be “the dominant force” to be the procuring cause. Under New York law, the rep need only establish a direct
and proximate link between the bare introduction and the completion of the sale. Finding that West Empire helped bring the bridge project to Ameron’s attention, “had some involvement in assisting Ameron to secure the project,” and did everything Ameron asked of it, the court ruled that West
Empire was the procuring cause of Ameron’s Peace Bridge contract. Judgment was entered for West Empire.
One lesson learned is that where a principal breaches its contract, the attendant duty of good faith and fair dealing can potentially help protect the
rep from an opportunistic termination. Another is the procuring cause doctrine can provide many reps with the opportunity to seek post-termination
commissions based on their pre-termination efforts.
Gerald M. Newman and Adam Glazer are partners in the Chicago law firm of Schoenberg Finkel Newman & Rosenberg, Ltd. He serves as general counsel to IHRA and they,
and other SFNR associates are regular contributors to The REPorter®. They participate in Expert Access, the program that offers telephone consultations to IHRA members.
You can call Gerry or Adam at 312-648-2300, send a fax to 312-648-1212, or send e-mails to: [email protected].
Page 2
Grossman (continued from page 1)
The other day a good friend of mine told me he was in a 4-hour meeting with his customer about extending his multi-million $$$$ contract. Management continued to stress that the decision would be made based on profitability, markdown $$$$, and promotional $$$$. Never was product
quality, product value or customer acceptance mentioned.
I will be the first one to tell you I am not the greatest “numbers” person, but I have been in this business long enough to know that being successful as a retailer, supplier or a professional rep is more that just managing the numbers. It is a combination of product development, presentation,
value, cooperation between parties and profitability for all parties.
I see our suppliers and retailers caught in the same blame game as Washington, DC. Instead of working together each side blames the other and
are unable to work together. The true goal for all of us is to move product thru the system, profitably, so we all can grow. Then we will be able to
hire and pay our employees so they can go out and buy goods and services.
I wish I had an answer to the above, but I have not given up on trying to find one. If you have suggestions please let me know. I’ll help spread
the word!
Steve Grossman, IHRA and MANA Member, CPMR; [email protected]; 847.368.1970
Tech Bit 54 - Plane Quiet
Here’s a continuing
feature in The REPorter
“Tech Bits”
If you fly a lot you’ll see more and more people wearing their own headphones, usually active noise
cancelling.
My first experience with noise canceling headphones came the first year United flew the new Boeing
777. Upgraded to business class, the headphones were nicer and had a noise cancellation switch. It
made a noticeable difference.
Active noise cancellation headphones work using a small microphone to listen to the outside noise
then generate a sound pattern that neutralizes that noise as it reaches your ear.
The gold standard for noise cancellation headphones has been the Bose Quiet Comfort 2 at around
$300. I actually think Able Planet’s Clear Harmony headphones have better sound because their digital
signal processing is more sophisticated.
Of course a $300 set of headphones you may leave on a plane doesn’t fit in everyone’s budget. My
Gregg Marshall, CPMR, CSP, is
first pair of active noise cancelling headphones were $50 from AWAI. They gave me a noticeable ima speaker, author and consultant.
He can be reached by e-mail at
provement, subjectively 80% of what I got from top of the line Bose. I’ve tried several similarly priced
[email protected],
or
headphones and found them to be roughly comparable
visit
his
website
at
While trying a pair of Senheiser XX-250 noise canceling headphones that were light and didn’t cover
http://www.repconnection.com.
the ear, I realized they did a great job if I held them against my ears. But just wearing them let noise
leak in around the ear. I understand the new Quiet Comfort 3 have a similar issue.
At the Consumer Electronics Show that year I had a chance to try a pair of Shure E3c in-ear headphones. They weren’t active noise cancelling,
they are called noise isolation, but they did an amazing job of blocking out the show noise. The pair I have flown with the last two years have worked
flawlessly (and they are very small).
Not everyone can wear in-ear headphones, they find them uncomfortable and I’m sure certain ear conditions make in-ear headphones unsuitable. I can. I’m not sure I would ever go back to regular headphones. I find them more comfortable (once you get used to having something stuck in
Continued on Page 4
Page 3
“Tech Tips” (continued from page 3)
your ear). I can even sleep wearing them, something I could never do with traditional headphone.
The next year at CES I was talking to the Shure people and they shared a paper written by Virginia Tech that showed that noise isolation headphones outperformed active noise cancellation headphones, a result I find empirically accurate.
I’ve tried a number of inexpensive in-ear headphones (as low as $10 from a Chinese vendor at CES that actually were pretty good but I’ve never
seen them in the US retail market). While the sound quality is “ok,” and I’m no audiophile, most don’t have enough options on their ear buds to get
a good seal. The vModa headphones have good sound but “leak.” Isolation is the name of the game as far as I’m concerned.
My current favorites are the Etymotic 6i isolation headphones, they came with a selection of ear buds (Available at Amazon). Same noise isolation as my E3c’s (lost on an airplane), but they deliver much better sound quality.
Noise canceling/isolation headphones are “the only way to fly.” Being on only one flight with the screaming baby 3 rows back will convince you. They are also great when you need to concentrate at the office or some other noisy environment.
Tech Bit 55 - Go Fast in Las Vegas
Despite President Obama, Las Vegas hosts a ton of trade shows every year. The next time you travel to Las Vegas, have I found a deal for you!
A lot of the strip hotels have spotty wireless internet (they want you in the casino not surfing the web) and those that do have internet charge heftily
for it.
The convention center has good WiFi, but again they charge for the privilege.
Add the two together and your internet bill will be larger than your food bill.
While at the Consumer Electronics Show I found a better solution that is somewhat unique to Las Vegas.
Las Vegas is one of the few cities with WiMax, a 4G service (LTE, the other 4G really hasn’t been introduced yet in the US).
WiMax gives you a theoretical 10 MBs, about the same as a great cable modem connection. I certainly got speeds that felt like my cable
connection at home. And it is definitely faster than 3G.
Cheetah, a small company in Las Vegas will rent you a WiMax adapter that plugs into your USB port or your Ethernet connection for what a hotel
typically charges. But you can carry it around with you and connect almost anywhere in the city.
If you are traveling with a group, and have more than one notebook computer, Cheetah has an option to rent a WiMax adapter with a small WiFi
adapter box that gives you a WiFi hot spot anywhere you happen to be. It’s definitely a less expensive option for a show booth.
My cost for the 5 days was about $10 a day for the basic connection.
Cheetah’s support is amazing. We picked up the modem at their offices since we aren’t staying on the strip (they deliver there). By the time we
got around to installing it, I noticed my new Windows 7 thin and light computer didn’t like the standard driver. I could have called until 1 am but found
an updated driver on-line quickly. When I emailed to add the hot spot adapter, they met me at the hotel where CES press conferences were being
held. If I wanted, I could have them pick up the hardware, or you can use the pre-addressed FedEx envelope to return it.
Their service worked so well I know exactly how I’ll be connected to the internet whenever I visit Las Vegas.
Before you get to Las Vegas, go to http://www. Cwti.net/theshow and reserve your own WiMax modem or hotspot. Or call them at
702-243-3824.
Page 4
Manufacturers Seeking IHRA Field Sales Professionals
Products: Pet Leashes & Collars, Grooming Tools,
Training Pads & Wipes. We now have “green” products
that are extremely hot in the marketplace!! This line
includes organic cotton and recycled polyester leashes
and collars. Our pricing is extremely low for the mass
merchandisers, etc. since we are a partner in a joint venture, vertical plant in China where we also manufacture
our own webbing!
JELLY GEAR COMPANY
P.O. Box 37
West Hempstead NY 11552
(516) 575-4272 Fax: (516) 575-4739
www.jellygear.com
Contact: Kathy Pancila, VP Sales
eMail: [email protected]
Territories: U.S.A., Canada, Mexico
Commission Rate: TBD
Years in Business: 60
Channels currently sold: Through direct factory
sales to wholesalers and/or other manufacturers
Seeking Sales Through: Reps selling to Retailers
Products: Mega-Catch™ Mosquito Traps and
accessory items
Manufacturers:
EnviroSafe Technologies
Limited for
AreInternational
You Looking
Unit 10, 6 Omega St., Albany
Auckland New Zealand 0632 Well-Qualified,
+649 441 7574 Fax:Performance-Proven,
+649 441 7573
www.megacatch.com
Field Sales Professionals?
Contact: Nicky Stockman, Sales Manager
eMail: [email protected]
Territories:
LA,Lines
AL, FL, .VA,
InstantTX,
HOT
. . NY, NJ, WI, GA, MI, MD,
CO,AMN
onetime eMail that
Commission
5% Years
in Business: 10
provides Rate: immediate
information
Gross
Sales:line,
$5,000.000+
on your
only, to
reps in
specific territories
or throughout
the world
CURRENTLY
DOING BUSINESS
IN THE USA: Direct. Not currently using reps.
CHANNELS INTO WHICH CURRENTLY SELL: Online
IHRA at (800)
Store Call
(www.megacatch.com),
drop315-7430
shipping including www.homedepot.com, www.costco.com, www.fronteMail:
[email protected]
gate.com. Using fulfillment house in Denver, CO.
www.ihra.org
CHANNELS INTO
WHICH WANT TO SELL: Drop ship
dealers
Manufacturers:
Are You Looking for
Well-Qualified,
Performance-Proven,
Field Sales Professionals?
Instant HOT Lines . . .
A onetime eMail that
provides immediate information
on your line, only, to reps in
specific territories or throughout the world
Call IHRA at (800) 315-7430
eMail: [email protected]
www.ihra.org
Products: High quality toilet seats in wood,
Manufacturers:
stained oak & mahogany finish,
soft, embroidered soft, and high Are
gloss You
solid plastic.
Looking for
Well-Qualified,
Centoco Plastics Limited
Performance-Proven,
2450 Central avenue
Professionals?
Windsor, Field
on n8wSales
4j3
519.945.7281
www.centoco.com
Instant HOT Lines . . .
Contact:
Cindy
Burns,
A onetime
eMail
thatAccount Manager
eMail: [email protected]
provides immediate information
on your line,
only,
to reps
in Canada
Territories:
Lowes
& Home
Depot,
specific territories or throughout the world
Nat’l Sales: $30MM
Commission Rate: Varies
Call IHRA at (800) 315-7430
Years in Business:
30 years
eMail: [email protected]
Channels currently
sold: Wholesale & Retail
www.ihra.org
Products: The ZIPIT - The World’s 1st & Only Battery Operated Blister Pack Opener.
The ZIPIT has
Manufacturers:
been on QVC several times and has done very well
Are You Looking for
View our product at www.WrapRageRelief
C.S.B. Commodities Inc Well-Qualified,
14000 Military Trail,Performance-Proven,
Suite 204B
Delray Beach FL 33071
Field Sales Professionals?
(800) 471-1367
Contact: Robert Schmeizer, President
Instant HOT Lines . . .
eMail: [email protected]
A onetime eMail that
provides immediate information
Territories: Seeking reps with track record of selling
on your
line,asonly,
to reps
to majors
such
Wal-Mart,
etc.in
specific territories or throughout the world
Nat’l Sales: $10,000,000
Commission Rate: 5%
IHRA at
YearsCall
in Business:
36(800)
315-7430
[email protected]
ChannelseMail:
currently
sold: Retail / E-Tailers / Catalog Companies / Premium Companies
www.ihra.org
Seeking Sales Through: Mass Merchandisers
Products: New and innovative Erasable Ink “Puzzle
Manufacturers:
Pen”
Are You Looking for
The Rome Group
P.O. Box 1000
Well-Qualified,
Killington VT 05751
Performance-Proven,
802.422.4466 • Fax: 802.422.4467
Field Sales Professionals?
Contact: Bernard Rome
eMail: [email protected]
Instant HOT Lines . . .
A onetimeAlleMail
Territories:
USA that
provides
immediate
information
Nat’l Sales: N/A
on your line, only, to reps in
Commission Rate: 7%
specific territories or throughout the world
Years in Business: 3
Channels currently sold: Direct to Gift Shops,
Airport
News
& Giftat
Shops
Call
IHRA
(800) 315-7430
Seeking eMail:
Sales Through:
Wholesalers, Catalogs,
[email protected]
Housewares, Bookstores, Stationers, Supermarkets
www.ihra.org
The listing of a manufacturer is not an endorsement by IHRA, it being the obligation of each member to make their own evaluation.
Page 5
Manufacturers: Contact These Performance-Proven, Multiple-Line, Field Sales Professionals
to learn how they can profitably bring your products and programs to market.
AMERICONSULT
AMERICONSULT
& International Trade, Inc.
P. O. Box 576
Princeton, NJ 08542, USA
Phone: (917) 592-5498
Italian Cellphone: +39-335-708-0483
Skype Phone: mavericknyusa
[email protected]
Since1986specializingintheSalesPromotionof
Housewares (cookware, small appliances) Home
Complements (bath & kitchen furniture, faucets)
and Gourmet Foods Sales.
Also assisting manufacturers in the establishment
of their company in the United States with local
domicile and all related logistics.
Fluency in English, Italian, French
Augusto De Feo, Managing Director
ERRECINET SRL
Corso Lodi, 34
I-20135 Milano
Tel: 02-8969-5033 • Cell: 340-978-8452
[email protected]
Bang-Knudsen
Representing gourmet
housewares to leading retailers
in the Pacific Northwest
for over three decades.
We know the territory.
Permanent showroom:
Suite 453 Pacific Market Center
6100 4th Ave., S.
Seattle, WA 98108
206-767-6970
www.bang-knudsen.com
__________________________
Contact:
[email protected]
Manufacturer’s Representatives specializing in
Home Decor, Housewares and Gifts
Primary Account Representation
Kohl’s
Jo-Ann Stores
Illinois Wisconsin Ohio
Professional Account Management
25 Years Experience
•
•
•
•
•
Efficient Account Penetration
Quality Customer Service
Market Trend Direction
Product Development
Sales, Inventory & Profitability Analysis
www.thebarringtongroup.net
Contact:
peake@the barringtongroup.net
16W273 83rd Street, Suite D
Burr Ridge, Illinois 60527
Phone: (630) 655-2924
Trusted Business Partners
Jeff Blackwell
& Associates
Representation - Specialized
Retail & Military,
Broker Coverage
Food - Drug - Mass
Military Exchanges
& Military Commissaries
Serving the
Metro New York Area
Since 1984
Housewares, Tabletop,
Storage/Closet
Hawaii Territory
Specialists at:
Bed, Bath & Beyond
Macys
Contact: Jeff Blackwell
[email protected]
49 Park Street
Montclair, NJ 07042
5136 Iroquois Ave.
Ewa Beach, Hawaii 96706
P 1-808-941-9826, F 1-808-944-2091
Cell 1-808-232-5053
Phone: 973.783.3338
Fax:
973.783.3148
www.goldenmarketinggroup.com
[email protected]
Page 6
Manufacturers: Contact These Performance-Proven, Multiple-Line, Field Sales Professionals
to learn how they can profitably bring your products and programs to market.
Specializing in
Housewares, Homestore
&
Giftware Industries
Since 1973
Representing Vendors in the
Six New England States
&
Upstate New York
51-13 Morgan Drive, Norwood, MA 02062
781-352-1400 (phone) 781-352-1450 (fax) www.northeastgroup.com
Representing Housewares,
Tabletop and Giftware to all
Major and Independent retailers
in New England
and Upstate NY
for 20 years
Contact:
[email protected]
440 Totten Pond Road Suite 100
Waltham, MA 02451
Phone 781-890-0111
STANLEY H. SILVER ASSOCIATES
National Sales Organization
Providing Coverage Throughout
The United States and Canada
Coverage in the Categories of
Housewares; Lawn & Garden;
Hardware; Patio;
Christmas & Electrical
Stan Silver
412 Woodbury Drive
Wyckokk, NJ 07481
Tel: 201-848-9229 • Fax: 201-848-8525
[email protected]
www.stansilverassoc.com
Tel: 781-806-5129
Fax: 781-806-5131
Page 7
2010 CALENDAR OF EVENTS
October
12 - 15
New York Tabletop Market
New York NY
Page 8
2010 IHRA Officers, Directors & Staff
IHRA MEMBERS:
Want to know more about RepCare group insurance? Just find your business home state and call Pat Brown or John Doyle.
Call PAT BROWN at 847-559-1331 if your business is in:
Arizona
Kansas
Nevada
Arkansas
Louisiana
New Mexico
California
Minnesota
North Dakota
Idaho
Missouri
Oklahoma
Illinois
Montana
Oregon
Iowa
Nebraska
South Dakota
Texas
Utah
Washington
Wisconsin
Wyoming
Call JOHN DOYLE at 888-243-0174 if your business is in:
Alabama
Connecticut
Colorado
Delaware
Florida
Georgia
Indiana
Kentucky
Maine
Maryland
Massachusetts
Michigan
Mississippi
Missouri
New Hampshire
New Jersey
New York
North Carolina
Ohio
Pennsylvania
Rhode Island
South Carolina
Tennessee
Virginia
Vermont
West Virginia
Home • Housewares • Gourmet • Hardware
Multiple-Line, Field Sales Professional:
If you’re not a member of IHRA, you owe it to
yourself to join the organization that is your voice in
the industry and the manufacturers’ resource for
finding
Well-Qualified, Performance-Proven,
Field Sales Professionals
Officers
Chairman: President: Founding President: Executive Director: Kent Kulovitz
Mark Glotter
Steve Grossman, CPMR
Bill Weiner
Directors
Robert Bachner
Jacob Bang-Knudsen, CPMR John Grob Linda Krol Seth Lapine
Morey McFarren Past Chairs
John M. ClampittDonna Peake
Steve Grossman, CPMR Jim Adams
Jay L. Cohen James Ayotte
Tom RooneyDavid Silberstein
Peter Bang-Knudsen
Staff
Administrative Assistant: Stephanie Baron
Financial Director: Myra Weiner
IHRA
The IHRA
International Housewares Representatives Association
For complete information about “first-timer”
membership and an application, contact us at:
847.748.8269 • 800.315.7430
Fax: 847.748.8273
[email protected] • www.ihra.org
Page 9