December wholesale revenues were up 11.6% from last year.
Day: February 10, 2011
Robert W. Baird & Co., in partnership with Modern Distribution Management, conducted a survey of more than 600 distributors and manufacturers to gauge business trends and the outlook for the distribution industry in diverse sectors.
On average, respondents to the latest quarterly MDM/Baird survey said fourth-quarter revenues were up 10.3 percent year-over-year. When compared to the third quarter of 2010, respondent sales increased 6 percent.
Optimism is beginning to return in most sectors, with forecasts turning toward conservative growth. For 2011, the average forecast for respondents is revenue growth of 8.3 percent when compared to 2010.
In a recent survey on price increases, 94 percent of respondents said they expect prices to go up in the first six months of the year. This article examines what respondents plan to do in response to what one called a ‘tidal wave of price increases’ in the first quarter. MDM also spoke to pricing and channel management experts on best practices in communicating price increases and managing profitability in a time of cost volatility and ongoing customer price sensitivity.
More than half of respondents to the fourth-quarter MDM/Baird survey expect price increases of 1 percent to 5 percent from their suppliers over the next six months. About 35 percent expect an increase of 6 percent to 10 percent.
And just 6 percent expect no increase.
Many manufacturers held off on price hikes in the past two years, due to heightened price sensitivity during the recession.
The way a price increase is communicated can cause tensions between manufacturer and distributor, but there are ways to reduce potential conflict, says Kevin Boyle, president of Industrial Distribution Consulting LLC.
One is to provide ample time for distributors to update their systems with the updated prices before they go into effect.
In the successful companies we’ve studied in our ongoing research into key differentiators in distribution, one of the most important and constant capabilities present in the organization has been a skill to leverage in just about every aspect of the business, internally and externally. That applies to every part of the business cycle and is intuitive.
In research for the new book from the National Association of Wholesaler-Distributors, Facing the Forces of Change: Decisive Actions for an Uncertain Economy, author Guy Blissett found that 51 percent of survey respondents offer value-added services associated with products, and 43 percent offer discrete services for a fee, with no product purchase required. Most plan to do so by 2015.
But while nearly half place “high importance” on assessing service offering profitability, only a fifth say they actually do an “excellent” job of this. MDM Editor Lindsay Konzak spoke to Blissett about these findings and what distributors can do to take a more strategic approach to building a profitable services portfolio.
News briefs from Jan. 25-Feb. 10, 2011.
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MDM Editor Lindsay Konzak spends 7 Minutes with ... Jeff Crane, CEO of Lewis-Goetz and Company, on end-market strength/weakness, Lewis-Goetz's acquisition, the impact of Audax Group's investment on company's growth, and communicating in a large company.
Lars Parkin, employee benefits broker and former president of Colorado's Front Range Association of Health Underwriters, addresses misconceptions about the health care reform, reasons health insurance costs have been spiking in recent years, and practice advice on how business owners can offset some of the costs associated with providing these benefits.
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Industrial third-quarter sales increased 44 percent.
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