July 25, 2009 - Modern Distribution Management

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July 25, 2009

Conditions Ripe for Better Pricing

Brent Grover of Evergreen Consulting recently spoke with MDM about the importance of the concepts outlined in his latest book, "Strategic Pricing for Distributors: Tools and Rules for Building Higher Margins." Grover writes that strategic pricing can result in an increase of 200 or more basis points (2 percentage points) of gross margin percentage. "It's far more dramatic than slashing the staff or reducing sales commissions," he tells MDM. This article looks at why now is a good time to implement a new pricing strategy and analyzes the importance of two key aspects: the sales team and technology.

Grover's book, written as part fable featuring the fictitious Mahoning Distributors, and part practical guide, was released by the National Association of Wholesaler-Distributors ...

Conditions Ripe for Better Pricing Read More »

Commentary: The Fear Factor in Change

Here at MDM we are in the midst of implementing some positive changes in how we do business. We are especially excited about one in particular, which we will be revealing to you in the next couple of months.

Our operations are different from a distributor's - MDM is a part of Gale Media, which is a specialized publishing and research business - but through our work, we are reminded of the challenges that come with change. Undoubtedly, these challenges transcend industry lines.

While we hope the ROI will be positive, there is only so much a business can control. And that's the fear factor in change.

But it's also exciting and provides a great opportunity for the company. We recognize the only way to continue growing is to make this investment of time and energy. We feel like ...

Commentary: The Fear Factor in Change Read More »

Economic Update: Is Recovery On the Way?

This is the first of a new monthly feature compiling the latest economic indicators to provide a more holistic view of the state of the economy.

The long climb to economic recovery may be beginning as a variety of economic indicators posted more positive results in May and June.While not all of the indicators posted positive results, many of those remaining negative declined at a slower rate. Though the outlook for recovery is still uncertain, many economists view these shifts as signs that the U.S. economy is heading into recovery phase with growth possible in 2010.

With the current recession in its nineteenth month, it is already longer and more widespread than the recessions in 1990-1991 and 2000-2001, according to Nouriel Roubini of the RGE Monitor, an economic analysis ...

Economic Update: Is Recovery On the Way? Read More »

Monthly Wholesale Trade: Sales and Inventories for May 2009

May 2009 wholesale revenues were $311.3 billion, up 0.2 percent from the revised April level, but down 19.9 percent from the May 2008 level. The April preliminary estimate was revised upward $1.4 billion or 0.4 percent. May sales of durable goods were down 0.2 percent from last month and were down 23 percent from a year ago. Sales of metals and minerals, except petroleum were down 8.1 percent for last month, while motor vehicle and motor vehicle parts and supplies were up 4.4 percent. Sales of nondurable goods were up 0.5 percent from last month, but were down 17.2 percent from last year. Sales of petroleum and petroleum products were up 4.6 percent from last month and sales of drugs and druggists' sundries were up 1.4 percent.
Total inventories were $402.2 ...

Monthly Wholesale Trade: Sales and Inventories for May 2009 Read More »

Inflation by Commodity Group: Second Quarter 2009

These select product groups provide a snapshot of inflation trends based on the Producer Price Index from the U.S. Bureau of Labor Statistics. Second quarter 2009 is compared with second quarter 2008, second quarter 2009 with first quarter 2009.

The product groups in this report:

Adhesives & Sealants
Cutting Tools & Accessories
Hand & Edge Tools
Power-Driven Hand Tools
Ball & Roller Bearings
Mechanical Power Transmission Equipment
Valves, Except Fluid Power
Pumps, Compressors & Equipment
Electrical Machinery/Equipment
Industrial Material Handling Equipment
Industrial Gases
Welding Machinery/Equipment
Fluid Power Equipment
Plumbing Fixtures & Fittings
Sanitary Paper Products
Plastic Resins & ...

Inflation by Commodity Group: Second Quarter 2009 Read More »

Distribution Financial Metrics and Trading Multiples: 2Q

This table highlights key financial metrics and trading multiples for 28 publicly traded distributors in the industrial and building products industries up to June 30, 2009. Download this data below. Also find graphic illustrating median EBIDTA multiples for the same distribution companies.

These materials, prepared by Robert W. Baird & Co. for MDM, are for informational purposes ...

Distribution Financial Metrics and Trading Multiples: 2Q Read More »

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