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?
Home » Blogs » Management & Strategy » Top 5 Shifts in Distribution in 2009
Lindsay Young Konzak

Top 5 Shifts in Distribution in 2009

By    Lindsay  Konzak 
December 25, 2009
More about:  Distribution Trends,  MDM Blog
Key shifts took place in the distribution channel over the past year, one of the worst economic downturns since the Great Depression.
Text Size
Email Print ShareShare/Bookmark
We have seen key shifts in the distribution channel over the past year, one of the worst economic downturns since the Great Depression. Based on MDM's coverage over the past year, we have put together a list of the top five shifts in the distribution industry in 2009. Read about 2009 in more detail in the Dec. 25, 2009, issue of MDM.
 
Doing More with Less
In the MDM Reader Survey, distributors and manufacturers report making many changes to improve or preserve profitability in their businesses, including: wage cuts, budget reductions, furloughs, hiring freeze, and increased focus on lower-cost marketing and online marketing and transactions. For many distributors, it was the first time they've had to make such dramatic cuts.
 
Massive Inventory Reductions
Adam Fein outlined in his recent MDM Webcast, "2010 Economic Forecast for Wholesale Distribution," that inventory levels have dropped significantly over the past year as distributors have faced decreased demand and increased need for cash. Hear why Fein says inventory may play a key role in the recovery in this audio clip from his Webcast.
 
Supplier Consolidation
The recession has had a significant impact on channel relationships. One impact has been supplier consolidation. Customers have reexamined each of their supplier relationships and in some cases pared down their supplier base from hundreds or even thousands to only a few. Distributors have also gone this direction, trimming the number of brands they carry. This process is likely to continue into 2010.
 
Deal Flow Slows
The past two years of Mergers and Acquisitions have been quiet compared with the boom years of 2005 and 2006 in M&A. Tight credit markets slowed deals considerably, and acquisitions of distressed companies were most common. Some top companies have been able to sell for premium valuations, but those have been few and far between compared with a few years ago. A key takeaway from this: Strategic buyers such as Grainger and Airgas have made a few acquisitions in the past quarter, increasing the speed of consolidation in the industry once again.
 
Distributors Explore New Markets
MDM Publisher Tom Gale wrote last year in his Dec. 25 perspective column in MDM Premium that new industry sectors often "rise from the ashes" in tough times, including alternative energy. The downturn forced many distributors and their suppliers to consider new markets and added the need for these companies to diversify their end-markets. One new focus has been "green" products and services.

 

Print Email ShareShare/Bookmark
Use the form below to leave a comment
captcha

Please enter the text you see above:

Not sure? Give me another.

  • MDM Podcast

Think About It:
'I Don't Know':
A Great Answer

Finding yourself frequently acknowledging, I don't know, is a signal that you have become a superior sales rep.

Listen now.

Learn more or subscribe to the Think About It podcast.

  • From Adam J. Fein, Ph.D.

Benchmark with Wholesale Distribution Economic Reports

Click on the video below to hear how to use this data for better business planning.

adam-video

  • MDM Store

The Answer Book for
Growth-Minded CFOs and
Controllers

answer book for CFOs and Controllers

Now Available: 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. Go to the MDM Store.
Job Board
Title Company Location
Midwestern Field Sales Territory Manager DeVilling & Associates Midwest, US
Senior Account Manager and National Account Manager Precision Dallas, TX
VP Sales & Marketing Confidential Southeastern, PA
Branch Manager Graybar Electric Company Garden City, NY
International Sales Manager Industrial Lubricants Manufacturer United States
National Sales Manager Steiner Industries United States
View ALL Wholesale Distribution Job Listings Post Your Job Listing


MDM Calendar

Technology Case Study

October 7, 2010

2011 Economic Forecast

November 18, 2010

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.
HR Strategic Answer Book

The HR Professional's Strategic Answer Book

Reviews (0)
 
Price: $249.00
This book takes the questions HR professionals were asking and provides real-world answers gathered from the best thinkers in the business, including working professionals, consultants and legal experts.
industrial-single

2010 Wholesale Distribution Economic Reports: Industrial Distributors - Single-User License

Reviews (0)
 
Price: $119.00

This report includes: Revenue and employment growth trends, the number and size distribution of companies, gross margin, wages, other operating statistics and expert commentary to help you interpret the sector data in light of current macroeconomic trends





Sponsored Links