In a penny nickel business, every penny counts. Which is why SPAs can matter. Increasing gross margins and, more importantly, net profitability, in today’s environment is extremely challenging. Publicly-held national chains such as Rexel and WESCO report net profitability in the 4-4.5% range whereas the NAED PAR report typically proclaims a 2-4% net profitability for … [Read more...] about SPAs- Are they Worth the Cost?
pricing
Does it feel like we’re heading into a recession …
Or are we talking ourselves into a recession? Since the fall and the beginning of planning season there have been some economists who have been warning of a second half 2019 slowdown leading to a 2020 recession. Their prognostications were based upon some trends, the fact that we’ve been in a growth cycle for awhile and “are due”, the last year’s tariffs and the one that was … [Read more...] about Does it feel like we’re heading into a recession …
Tips for Distributors to Improve Gross Margin
Corporate success, for many, is typically defined as sales success as sales revenue is an easily identifiable, and discussed / shared, metric. But in a quest to grow sales, and due to competitive pressures, gross margins for many distributors have eroded making gross profit dollars more scarce for investment back into the business. And with operating costs increasing and … [Read more...] about Tips for Distributors to Improve Gross Margin
Grainger Turning a Corner?
Continuing our Q3 earnings observations, next up is Grainger which is a traditionally a good barometer for the industrial MRO space and lately has been a case study in value proposition, price and fear of Amazon Business. From the earnings call and their slides: Overall \"a solid quarter and there were some positive signs\". Seeing growth coming from their price reduction … [Read more...] about Grainger Turning a Corner?
Can You Afford Declining Margins?
2016 seems to have been the \"year of pricing\". A number of distributors either discussed, or undertook, pricing initiatives this past year. In many instances it was a desire to reverse an industry trend ... eroding margins. Others recognized that if they invested in eCommerce they needed to ensure that the price shown on their website was the same that the customer received … [Read more...] about Can You Afford Declining Margins?
Drive for Data
Over the past month or so Allen and I have had a number of calls for data. Some are from owners / senior management, some from marketing personnel and some from operational staff. The calls are from manufacturers and distributors. The commonality is that there appears to be a call for more quantitative information for companies to benchmark their business, understand their … [Read more...] about Drive for Data
