This is a part of the 2013 Distribution Trends Report. The annual report was researched and written by MDM editors based on interviews with dozens of wholesaler-distributors, as well as industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this report.
2013 Distribution Trends Report
Distributors have mixed expectations for 2013. Ken Jacobson, partner at Principia Consulting, told MDM in February that distributors’ expectations for 2013 “depend on the day you’re asking,” varying depending on the latest political news or economic report. ProSales Magazine editor Craig Webb says he’s seen improved attitudes post-recession. “It was really a painful time. But now they’ve got their noses above water. They know they’re not going to drown anymore,” Webb says. Julia Klein, CEO of specialty building products distributor C. H. Briggs Company, Reading, PA, says it may not be time to celebrate just yet. “The biggest and most encouraging trend is a little bit of rebound in the housing market, although I would temper that by saying that any increase is off of such a low that I’m not quite sure that we’re on a solid upward swing that will really make a difference quite yet.”
Hiring continues to be difficult, thanks to the volume of people who lost their jobs in this sector after the crash. ProSales Magazine editor Craig Webb says: “A lot of those people lost their jobs in the downturn and went out and found other jobs, and they’re not coming back.”
Distributors and their customers face cash flow challenges. “Banks have only recently opened up the spigots again, and ‘opened up the spigots’ is probably overly-generous,” Webb says. “They may have turned the handle slightly.” This has made inventory management, a challenge for almost any distributor, particularly challenging in this sector.
Distributors are buying into new technology to improve cross-selling opportunities and increase productivity. Webb says he’s received reports of distributors buying into technology that had not been a few years ago. Greg Bloom, chief sales and marketing officer at Allied Building Products, says the company is monitoring social networks to find out how to do a better job of utilizing social media for its critical services. Klein, at C. H. Briggs Company, says the company would like to build on its existing data platform, Inforce Everywhere, to find ways to incorporate external information on their customers and product end-users to better identify cross-selling opportunities and customer needs.
HD Supply’s line of business White Cap Construction Supply opened its new headquarters and regional offices in April 2013, including a branch and distribution center with over 128,000 square feet, in Norcross, GA.
ABC Supply Co. Inc., Beloit, WI, acquired Lee Wholesale Supply Inc., a distributor of steep-slope roofing, siding and windows with four locations in Michigan, in March 2013.
Beacon Roofing Supply Inc., Peabody, MA, has made a string of acquisitions over the past year, including Ford Wholesale Co.,San Jose, CA and CA-based Construction Materials Supply, Pittsburgh, PA-based McClure-Johnston Co. and Structural Materials Co. in Santa Ana, CA.
In April 2012, Roofing Supply Group, LLC, Dallas, TX, agreed to sell the business to private equity firm Clayton, Dubilier & Rice, LLC, from The Sterling Group.