A distributor can replace stolen inventory and repair a damaged fence. Recovering the time spent managing the aftermath — or winning back a customer whose order never arrived — is considerably harder.

That broader business exposure anchored NAW’s Oct. 8 webinar, “Beyond the Break-In: The True Cost of Theft in Distribution,” sponsored by perimeter security provider AMAROK. Keith Schoffstall, AMAROK’s National Account Director, and Scott Katz, Founder of Katz Advisory Group, explored how distributors can better understand facility vulnerabilities and justify investments before an incident forces their hand.

I served as moderator for this webinar, which was a nice change of pace from the AI and other technology-centric webinars NAW and MDM have rolled out over the past several years given the constant demand for insights on those fronts. While AI’s industry proliferation makes it easy for executives to have cybersecurity top-of-mind when they think about protecting their business and risk management, this webinar was a great reminder that every distributor has facilities, products and people to protect and the significant costs that can arise when that doesn’t happen.

Katz brought experience leading facilities and real estate initiatives across more than 170 QXO branches. Schoffstall contributed a perspective developed over more than a decade helping businesses protect facilities and assets.

Their discussion connected perimeter security directly to the reliability of a distributor’s operations, its customer commitments and its employees’ confidence.

Count the Costs That Land Outside the Inventory Ledger

Katz illustrated the financial consequences with a hypothetical incident modeled on situations he had handled, using fictional numbers and a fictional location to protect company information.

The scenario began with $525,000 in stolen inventory. Damaged forklifts and fencing pushed direct costs to $631,000. Add recovery work, employee time, customer-related losses and other consequences, and the modeled total reached $826,250. Even after an assumed $350,000 insurance recovery, the company’s remaining cost was $476,250.

The exercise showed how easily an inventory-loss figure can understate the business impact.

Branch managers and salespeople spend hours contacting customers. Employees receive replacement inventory and coordinate transfers. Facilities personnel arrange repairs, while legal and insurance teams work through claims. Those costs spread across departments and budgets, making the full impact harder to recognize.

For customers, the distributor’s explanation may offer little comfort.

“The customer does not care if you get broken into or not,” Katz said. “You can tell them, but that doesn’t change the fact that they can’t put a roof on today or tomorrow.”

A missed delivery can send a customer to a competitor. Whether that customer returns creates an additional exposure that extends well beyond the cleanup.

Evaluate Each Location on Its Own Terms

Schoffstall and Katz cautioned against assuming that similar-looking facilities face similar risks.

Two branches might both have fencing, cameras, gates and lighting, yet differ substantially in surrounding crime activity, road access, neighboring properties, operating hours and outdoor inventory. Those differences should influence both the security measures selected and where a distributor invests first.

“Security can’t just be a box that you check and call it a day and say, ‘We did everything we needed to,’” Schoffstall said. “It has to be continuously evaluated.”

Katz described a shift toward more organized theft during his time at QXO, with groups arriving with trucks, infrastructure and knowledge of access routes. Schoffstall likewise described criminals testing properties and returning after learning what they could access.

Their advice was to combine risk data with an examination of the property itself. Fence lines, gates, blind spots and exposed assets deserve attention, as do less obvious access routes such as low roofs.

Schoffstall also identified possible warning signs, including objects stacked where they should not be and repeated alarms that could indicate someone testing the response.

Give Each Security Layer a Job

The speakers organized effective protection around four functions: deter, detect, delay and respond.

Physical barriers can discourage entry and slow access. Cameras and detection systems can identify activity. Lighting can improve visibility. Access controls and operating procedures help manage who enters, while response plans establish what happens when a threat is detected.

Katz recalled facilities where existing cameras, fencing and gates had created confidence that proved misplaced.

“We thought we were protected,” he said. “And then it turns out, hey, we weren’t.”

Schoffstall emphasized early detection and sufficient delay to support a response. He also stressed that employees and leadership must understand the plan, including responsibilities for checking alarms, arming systems and maintaining the property.

Employee safety deserves explicit consideration throughout that process. Schoffstall noted that visible investment in protection helps demonstrate that the company values its people alongside its products. Katz also cautioned that assessments should account for internal involvement in theft.

Build the Business Case Before the Emergency

Katz recommended evaluating the cost of individual security layers against the assets exposed and the potential downside. The appropriate combination depends on the location; the financial case should be deliberate.

Emergency spending makes that discipline harder. Temporary guards may be needed while vendors are evaluated, approvals are secured and permanent improvements are installed. Meanwhile, an inadequately protected site may remain vulnerable to another incident.

“Absorbing a reactive cost is miserable because it was never planned for,” Katz said. “You can plan for a proactive cost.”

Schoffstall added that rushed decisions can produce either insufficient protection or overinvestment. Regular assessment gives distributors more opportunity to match spending to actual vulnerabilities and preserve operational continuity.

For a fuller discussion of the cost model, facility assessments and layered protection, explore NAW’s “Beyond the Break-In” webinar, featuring Schoffstall and Katz.