POS / POT Standards Endorsed by 17 Manufacturers

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Equitable compensation is a topic that is near and dear to every manufacturer, distributor, manufacturer rep and salesperson. After all, why “sell” a product if you are not compensated for it?  This is one of the key issues facing electrical manufacturer representatives who sell / support distributors that have CDCs (central distribution centers / warehouses) and / or RDCs (regional distribution centers) and why POS / POT (point of sale and point of transfer) is an important topic.

Manufacturer reps, and frequently manufacturer direct salespeople and sales management, depend upon distributors to provide sales information to the manufacturer and the honesty of the manufacturer to allocate sales to the appropriate territory for compensating their representative.  And the issue is for direct sales into a territory as well as for sales that are facilitated through product being transferred into the rep’s territory.

The issue of POS / POT (point of sale / point of transfer) was originally addressed 10 years ago via an NAED task force. A white paper result with variable affect.

In 2014 NEMRA commissioned a study, at the request of its members as well as its manufacturer council (NMG) to understand the “State of POS / POT“.  The results (click here) revealed a significant gap as well as a significant administrative cost.

In 2015 NEMRA launched a joint Manufacturer Rep / Manufacturer Task Force to review the report and make recommendations.  At the same time the five national chains were engaged to solicit their support. Each organization, at a senior level, received a copy of the report and committed to helping making the process better … especially when they read the part that emphasized that a significant percentage of reps will redirect business if they do not believe they will be compensated by a company that facilitates product movement via CDCs or RDCs.

At the recent NEMRA Annual Meeting the first deliverable was introduced. This is a recommendation for a common POS / POT reporting structure. All of the fields currently are supported by most distributors and manufacturers. The key is that the order of the fields would remain constant … for all distributors and all manufacturers.

NEMRA shared the following press release (also available here):

17 Manufacturers Endorse NEMRA POS / POT Reporting Standard

At the recent NEMRA Annual conference seventeen electrical manufacturers endorsed proposed reporting formats for point of sale / point of transfer (POS / POT) reports submitted by distributors to manufacturers and supplied to manufacturer reps by their manufacturers.

“Our members have talked about problems with the POS / POT process for a long time and many feel that as much as 10-20% of their earned income is impacted by poor POS / POT reporting procedures,” said Ken Hooper, president of NEMRA. “The research clearly documented that many reps will direct business to distributors from whom they know they will be paid. Working with our manufacturers committee, it was decided to address the issue and to make it more equitable and efficient for all.”

The endorsing companies are American Polywater, CRC, Electri-Flex, Halex, General Cable, Ilsco, King Electric, Legrand, Leviton, Lighting Efficient Design, Littelfuse, Minerallac, Morris Products, Northern Cables, Orbit Industries, RAB Lighting and Ventamatic. (It should be noted that there are other significant manufacturers reviewing the standards for their own internal evaluation and additional endorsements are expected.)

The reporting standard, which integrates 15 core reporting fields, is the first deliverable from NEMRA’s State of the POS / POT study released last year. The report recommended a task force consisting of manufacturers and manufacturer reps be formed to help streamline reporting and improve the overall process. The objective being to ensure reps are appropriately compensated and that complete field support is provided to distributors that provide accurate POS / POT reports.

As part of this initiative NEMRA has engaged with the five national chains (CED, Graybar, Rexel Holdings, Sonepar and WESCO) who have pledged their support in improving the process.

The major benefit of this initial standard, which focuses on non-commodity items, is to standardize the report format, resulting in the same columns being reported in the same order for multiple manufacturers. Additional information agreed upon between a distributor and a manufacturer would be placed to the right of the first fifteen columns.

According to a few reps at the meeting, “These are the types of initiatives that help us be more efficient and productive.” Another commented, “this will help us better administer our POS / POT information and manage our commissions.” and a third said “easily understood and presented information will help us better support distributors that have RDCs and CDCs (distribution centers), it provides more transparency.” One distributor ERP company commented, “a common format just makes sense.”

Additionally, the term “point of sale”, for most manufacturers, has been refined as “place of sale” as this supports the need for appropriate compensation reporting. Customer level information is left to the discretion of the distributor / manufacturer relationship.

A number of best practices are shared in the document. Recommendations to address commodity product reporting are planned for later this year.

This industry initiative is open to all manufacturers whether they go to market through manufacturer representatives, direct sales people or lighting agents as it is designed to streamline processes for all channel members. There is no cost to adopt the standard.

NEMRA is currently soliciting comments on these standards through March 31. To receive a copy of the standards and to endorse them, email Ken Hooper at or David Gordon, NEMRA POS / POT project facilitator.

Information on the standards were shared with a number of other manufacturers at the NAED South-Central.  If you (distributors with RDCs/CDCs and manufacturers) would like to learn more at the upcoming NAED National meeting, email Ken Hooper or David Gordon to reserve a meeting time. A future phase will address commodity products.

NEMRA also encouraged its manufacturer representative members to reinforce the importance of this initiative to their manufacturers.

The importance, and issue, of POS and POT reporting has grown as distributors consolidate and as they seek to optimize their logistics. Retaining support of local reps as well as providing accurate information in a consistent format to manufacturers can only improve data quality, efficiency and reduce administrative costs.

While it is a “challenge” to seek standardization on many channel issues, the reformatting of report columns shouldn’t be one of them.

Does POS / POT reporting affect you?

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