Survey Highlights Distributor Demand, Capital, & Pricing Concerns
As we've reported in this blog over the past week, the second quarter 2010 MDM/Baird Distribution Survey results are out. Overall in the survey, second-quarter revenues were up 7.8 percent on average. In the second quarter, pricing was up 1.4 percent, and gross margin was down by 40 basis points. Respondents expect on average that revenues will grow 6.6 percent in the third quarter 2010.
|
We Deliver Distribution News to Your Inbox Sign up below to receive MDM Update, your free weekly distribution news update by email. |
Here's a quick overview of some interesting trends noted in the survey; a full overview with individual sector data will be published in the July 25 issue of MDM Premium (subscribe for access).
Working capital seems to be an issue for some smaller distributors as demand picks up again. "The recovery has definitely put higher working capital demands on a lot of weaker distributors," wrote one respondent. (Read more about this issue in the recent MDM article: The Rush to Meet Growing Demand)
Many respondents said that larger distributors in their markets were growing more aggressive. Airgas, Radnor, PA, and MSC Industrial Direct, Melville, NY, were noted as two that were focused on taking market share. Some respondents said they have had to walk away from contracts because of pricing pressures in the bidding process.
Inventory levels in most segments remain low. In fact, customers continue to be conservative, making it more difficult to predict demand. "Half of our customers won't order until they have an order in hand, which is creating spikes in sales," a distributor wrote.
Pricing trends, of course, vary by product. In many cases, pricing is going up. "Fastener prices are up 15 percent to 20 percent in some cases," wrote one respondent. "We're going to be hit when we rebuy in the third quarter." Some distributors have been able to pass those increases along. A gases and hardgoods respondent wrote: "I've been able to increase my prices above the increase from my supplier and have had very little pushback." On the electrical side, copper seems to represent a "slight tailwind." "There's no doubt that we're getting a positive push from copper pricing vs. last year," said one respondent, "probably a low single-digit top-line impact." (The second quarter Inflation by Commodity Group, based on the Producer Price Index, will be published in the July 25 issue of MDM Premium.)
 |
|
| View the Top Distributors in 12 Sectors: | |
| 2011 Distribution Landscape Report: Access Now | |
Join MDM's Independent Distributor
Network 
Follow MDM on Twitter
Sponsored Links
- Cloud ERP, the next innovation in distribution software. Learn more.
- Get better eCommerce, an easier back-end, and increase revenue.
- Free GCommerce whitepaper: How to reduce transaction costs, streamline special orders
- Cloud ERP, the next innovation in distribution software. Learn more.
- Protect your revenue and grow your business with Cortera PulseTM
- NSK's P4Y precision-class universal bearings' multiple configurations reduce inventory
- Resources and training tools for distributor sales, management and more in the MDM Store
MDM Digital
 The Case for Mobilein 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:The Festering Euro-Crisis MAPI Economist Kris Bledowski analyzes the outcome of recent meetings about the European banking and debt crisis. Watch now. |
 Online Marketing Tipsfrom Bob DeStefano Many companies make the same mistake on their company websites. Do you? Find out. |
More Audio and Video Features from MDM: |
Think About It: |
Upcoming Programs
|
Wholesale Distribution Economic ReportsThe most comprehensive source of data about the wholesale distribution industry.
* Plan strategically for the year ahead with accurate data.
|
Training Resources
 |
 |
 |
 |
|||
|
Featured Article - MDM-Baird Benchmarking Survey: Distributor Optimism Returns $34.95 |
Management Tips from Modern Distribution Management $49.95 |
Inventory Management Best Practices with Jon Schreibfeder: DVD + Book $119.00 |
Benchmarks & Best Practices: The Answer Book for Growth-Minded CFOs & Controllers $249.00 |
| Title | Company | Location |
|---|---|---|
| Channels Marketing Representative -- Advanced Supply Chain Business Information Systems | Scientel Intormation Technology, Inc. | Southeast Michigan |
| Technical Trainer - Innovative Change Agent - Long Island City, NY | Daikin AC | Long Island City, NY |
| Sales Representative | Superior Essex | Minnesota |
| Strategic Sales Consultant | IDC-USA | Indianapolis, Indiana |
| Counter Sales | Heating and Cooling Supply | Chatsworth, California |
| Counter Sales | Heating and Cooling Supply | Thousand Palms, CA |
| Territory Sales Manager/Outside Sales | Heating and Cooling Supply | San Fernando Valley, California |
| View ALL Wholesale Distribution Job Listings |
|
|
Industry Topics sponsored by
Distribution Trends
|
Economy
|
Management/Strategy
|
Interviews
|
Operations
|
Technology
|
Mergers/Acquisitions
|
Case Studies
|
Sales & Marketing
|
MDM Calendar
Operating for Profit: The Coming Revolution in Supply Chain Finance
Mobile Technologies for Distributors with Steve Epner
Featured Products
Benchmarks & Best Practices: The Answer Book for Growth-Minded CFOs & Controllers
2011 MDM Market Leaders and Distribution Landscape Report
The B-to-B Online Marketing Toolkit:
A Step-by-Step Plan for Distributors and Manufacturers to Leverage Online Marketing
for Bottom Line Results
Comments
Leave a Comment