Subscriber Login

MDM Premium Content  What's this?
Close
Subscribe today to access MDM's premium content with two issues a month of timely and to-the-point content for the busy wholesale distribution executive. Here's what you get:
  • Analysis of distribution trends
  • Interviews with industry leaders
  • Quarterly Public Distributor Report
  • Quarterly Inflation by Commodity Group Report
  • Market and economic data analysis
  • Access to the best online research tool in distribution

And much more! Learn more

login close
Forgot Your Password?
For more precise results try using quotation marks ("") around your search terms. See more search tips.

 

Home » Commentary: The Story Behind Gross Margin Trends

Commentary: The Story Behind Gross Margin Trends

By    Thomas P.  Gale 
April 10, 2004
More about:  Economy,  Sales & Marketing
The U.S. Census Bureau publishes its Annual Benchmark Report for Wholesale Trade to provide national estimates by kind of business on monthly and annual sales, inventories, purchases and gross margin for merchant wholesale businesses.

The gross margins to sales ratios from 1993-2002, here, makes for some interesting comparisons across industries. It also indicates that, with a few exceptions, gross margins have held up over the past ten years for wholesaler distributors.

At first glance, the ten-year trend flies in the face of strong downward pressures distributors have faced in terms of gross margin. The numbers don't tell the real story about the major shifts most distributors have made from managing a strong sales growth ...

Text Size
Email Print
The U.S. Census Bureau publishes its Annual Benchmark Report for Wholesale Trade to provide national estimates by kind of business on monthly and annual sales, inventories, purchases and gross margin for merchant wholesale businesses.

The gross margins to sales ratios from 1993-2002, here, makes for some interesting comparisons across industries. It also indicates that, with a few exceptions, gross margins have held up over the past ten years for wholesaler distributors.

At first glance, the ten-year trend flies in the face of strong downward pressures distributors have faced in terms of gross margin. The numbers don't tell the real story about the major shifts most distributors have made from managing a strong sales growth cycle in the last decade to managing a shifting and sometimes wrenching growth mode, with much stronger focus on a smaller, more targeted customer base.

From a big picture perspective, you can make the argument that the numbers show distributors have been extremely effective at doing what they do well in the face of unprecedented challenges: providing the critical flexible link throughout economic cycles that adapts and finds new ways to add value to both the demand and supply sides. That flexibility is all about innovation, ability to read customer needs, and connecting the right products and solutions.

At the end of the day, perhaps the most compelling (and obvious) conclusion from these government statistics is that it isn't how much pie you get served, but how you manage the pie on your plate. That's what separates the higher performing companies when it comes to profitability. That hasn't changed over a decade and radical changes to most channels of independent distribution.

Print Email
Use the form below to leave a comment

MDM Digital

Executive Briefing: January 2012The Case for Mobile
in Distribution Marketing
John Sonnhalter explains why distributors should include mobile in their marketing plans and how to start. Watch now.
iPad users: click here to view.		 Economic Update January 2012 Economic Update:
The Festering Euro-Crisis
MAPI Economist Kris Bledowski analyzes the outcome of recent meetings about the European banking and debt crisis. Watch now.
Bob DeStefano's #1 Mistake on Company WebsitesOnline Marketing Tips
from Bob DeStefano
Many companies make the same mistake on their company websites. Do you? Find out.		 More Audio and Video Features from MDM:

  • MDM Podcast

Think About It:
When They Google,
Will You Be There?

In this digital age, the first stop a potential customer makes is the internet. If you're not there, you're not part of the decision-making process.

Listen now.

Learn more or subscribe to the Think About It podcast.

  • Training

Upcoming Programs

Feb. 9: Operating for Profit: The Coming Revolution in Supply Chain Finance with Jonathan Byrnes. This program is part of the quarterly Islands of Profit Webcast Series.

Did you miss MDM's recent webcasts? Order the DVDs and share with your team today:

* Leading for Profit: How to Lead a Profitability Turnaround

* Inventory Management Best Practices in 2012

  • Featured

USAbrasives-100-for-trifecta

U.S. Abrasives Market Demand Report

This report provides a three-dimensional view into estimated market size, customer segment potential and customer size demographics for the U.S. Abrasives Market.

These three data slices give you deep insight into total market potential and your market share by both customer type and size.

Learn more about the U.S. Abrasives Market Demand Report

Training Resources

Current Issue   Management Tips 2011   Inventory Management   Benchmarks and Best Practices

Featured Article - MDM-Baird Benchmarking Survey: Distributor Optimism Returns

$34.95

Buy now >>

Management Tips from Modern Distribution Management

$49.95

Buy now >>

Inventory Management Best Practices with Jon Schreibfeder: DVD + Book

$119.00

Buy now >>

Benchmarks & Best Practices: The Answer Book for Growth-Minded CFOs & Controllers

$249.00

Buy now >>
Job Board
Title Company Location
Credit/Collections Manager APR Supply Co. Lebanon, PA
Management Trainee APR Supply Co. Lebanon, PA
INDUSTRY SPECIALIST - Rubber Products KAMAN Industrial Technologies North East Area - CT, MA, ME, NY, RI, VT
Sales Account Manager - Energy Market Segment TESSCO Baltimore, MD
Channels Marketing Representative -- Advanced Supply Chain Business Information Systems Scientel Information Technology, Inc. Southeast Michigan
Technical Trainer - Innovative Change Agent - Long Island City, NY Daikin AC Long Island City, NY
Sales Representative Superior Essex Minnesota
View ALL Wholesale Distribution Job Listings

MDM Premium

January 25, 2012  

4202 cover image

MDM/Baird Survey: Optimism Returns

Rexel's U.S. CEO on Service & Alternative Energy

Global Markets Not Just for Large Companies

December 2011 Industrial Inflation Index

subscribe now View Table of Contents >>
Subscribers: Log-in
View Previous Issues


Featured Products

answer book for CFOs and Controllers

Benchmarks & Best Practices: The Answer Book for Growth-Minded CFOs & Controllers

Reviews (0)
 
Price: $249.00
An ultra practical idea-guide that gives an inside look at how leading companies are dealing with some of today's toughest financial and business management challenges.
Distribution Landscape Report - 2011

2011 MDM Market Leaders and Distribution Landscape Report

Reviews (0)
 
Price: $295.00
The ideal resource for anyone that wants to get a quick overview of the distribution landscape and the top players in major sectors! Includes the 2011 Distribution M&A Special Report.
B-to-B Online Marketing Toolkit Cover

The B-to-B Online Marketing Toolkit:
A Step-by-Step Plan for Distributors and Manufacturers to Leverage Online Marketing for Bottom Line Results

Reviews (0)
 
Price: $249.00
The 2011 Edition of this valuable marketing tool provides a step-by-step plan for leveraging Online Marketing to produce Bottom-Line Results. Bulk pricing available.


tech directory: start your search here



Sponsored Links