Sales and M&A activity shared center stage during the second quarter of 2022, as evidenced by where MDM readers’ eyes took them during the past three months. Fastenal reporting a slight slowdown in daily sales but a steady growth in its headcount was among the top-read stories from April, May and June. Contributing authors Benj Cohen and Nichole Gunn offered tips for improving customer relations and increasing bottom-line sales. M&A news featuring MSC Industrial and Imperial Dade also moved the needle in 2Q, as mergers and acquisitions ramped up following a relatively slow first quarter.
These were MDM’s most-read stories during 2022’s 2Q:
Fastenal’s May Shows Modest Daily Sales Slowdown, Headcount Keeps Growing
In early June, industrial distributor and supply chain solutions provider Fastenal reported its May 2022 sales and headcount information, and the numbers showed continued strong sales growth, though at a slower pace than in prior months. The company reported total May sales of $589 million, up 23.5% year-over-year, with daily sales up 17.6%. May’s daily sales growth was its slowest since January’s 14.9%, following year-over-year marks of 20.3%, 19.1% and 21.3% in April, March and February, respectively. Fastenal ended May with a total headcount of 21,444, up 5.8% year-over-year and up 0.6%, or 138 since the end of April. The company has added 937 employees since the end of 2021.
Distributors Shed COVID but Prepare for Other Potential Crises in 2022-23
During a webcast with MDM CEO Tom Gale, University of Colorado Leeds School of Business Executive Director Brian Lewandowski called MDM’s 2022 Mid-Year Economic Update “a presentation of economic musings during a period of uncertainty.” He said it’s not clear what shape the industry will be in a year from now, due in large part to a mix of headwinds and tailwinds that affect the industry’s growth overall. As the COVID-19 pandemic has waned, most U.S. market sectors and distribution verticals seized the economic opportunity and thrived during the first half of 2022. However, with record inflation, ongoing supply chain issues and labor worries, the next six to 12 months will introduce uncertainty for many distributors and manufacturers.
Imperial Dade Gains Investment Fuel for Further Expansion
On May 2, private equity firm Advent International agreed to acquire a large stake in Imperial Dade from Bain Capital Private Equity. Advent is expected to have joint board governance and join Audax Private Equity as major investors in the company. Imperial Dade has seen its revenue soar from $2 billion to $5 billion since 2019 through numerous acquisitions of regional distributors, alongside organic growth. The company announced 13 bolt-ons in 2021 and announced several more in the first half of this year. Imperial Dade has topped 50 acquisitions under the leadership of father-and-son duo of Robert Tills (chairman) and Jason Tills (CEO).
MSC Industrial Grows in Midwest, Acquires Engman-Taylor
The metalworking and MRO supplies distributor announced June 3 it had acquired Engman-Taylor — a metalworking tools and supplies distributor based in the Milwaukee, Wisconsin-area suburb of Menomonee Falls. It was MSC’s third acquisition in the past four years, coming one year after the company announced the addition of Wm. F. Hurst Co. (Wichita, Kansas). Before that, MDM readers would have to go back to May 2018 for MSC’s other most recent acquisition — of fellow southeast Wisconsin-based distributor All Integrated Solutions (Franksville, Wisconsin).
Does Your CRM Really Help You Manage Customer Relationships?
If a company’s current CRM isn’t helping it manage customer relationships and ultimately driving sales growth, it’s time to find a solution that will be more effective, writes Benj Cohen, founder of Proton.ai. In a May 6 blog, Cohen outlines how companies often experience low adoption of CRM because sales teams find it burdensome to enter customer data manually. “As a result, distributors may miss out on a CRM system’s untapped potential: nurturing customer relationships to drive sales growth,” he writes. Cohen lays out how businesses can use CRM systems to foster improved interactions with customers.
How to Use Incentives to Increase Bottom-Line Sales
There are two common options for distributors and manufacturers who want to increase channel sales, writes Nichole Gunn, chief marketing officer at Incentive Solutions: discount products or run a marketing campaign. The downside of both is that they require an investment. In a June 8 blog, Gunn discusses how incentive programs make discounts and marketing more cost-effective for distributors and manufacturers, boost salespeople’s performance and build excitement around a company’s products.