The 2020 Mid-Year Economic Update_long

Day: August 25, 2010

Challenges Facing Buying Groups

This article evaluates challenges buying and marketing groups face in today's markets. Part 1 of this article, published in the Aug. 10, 2010, issue of MDM, looked at the benefits and evolving role these groups are playing for distributors and manufacturers.

While they have seen many successes, buying and marketing groups like other organizations that support the distribution industry face challenges in a marketplace besot by slow sales, cost and margin pressures, and consolidation.

Along with these economic challenges, about a third of respondents to a recent MDM survey on the topic said that loyalty and providing ongoing value to member distributors and vendors were top challenges.

Other challenges noted by respondents included:

MDM Interview: Distribution M&A Valuation Trends

M&A activity has started to pick up again. Recently, MDM spoke with Jon Skelly, managing director at investment banking firm Vetus Partners, about the current state of the M&A market, the types of businesses that are selling, and the most common mistakes made when valuing an acquisition.

MDM: This seems like an interesting market right now.

Jon Skelly: There are days where there is a lot of activity. And the next week it's eerily quiet. The market is so diverse right now. We thought it would be off to the races, but recently there's been a lot of bad press on the economy that …

Commentary: More Uncertainty Requires Better Planning

Beyond the core management team, how involved are your employees in the company's annual planning process? Do your employees know what the business plan is for the remainder of this year? Many distributors would answer "no" simply because this year has been unlike most others.

With so much uncertainty in the first quarter, the plan was hope and survival. When results exceeded expectations, the focus shifted to generating revenue and managing demand …