The Distributor Channel

One point of discussion among distributors across all lines of trade comes under the heading of POS data. Distributors find themselves being muscled into providing POS data which is expensive (because every manufacturer wants it done differently) and distracting. In a recent informal poll conducted by this office, most distributor sales managers could think of just one or two suppliers who provided them with a reasonable clue that POS data was being used for anything worthwhile. A recent survey completed by Pembroke Consulting backs up this largely anecdotal story. Distributors and their partners need to get together on this. Sending data "over the wall" where it is not properly used is only friction in the channel. AHTD , PTDA , NAED and a number of others have developed POS guideline models that need serious consideration. A survey recently completed by Pembroke Consulting uncovered a "surprising number" of companies, still using manual systems for collecti

The National Association of Electrical Distributors (NAED) has announced a major new initiative to position their members as a viable source for "Green Stuff". There will be competition... Electrical Distributors made a similar play with data-com related products in the mid-90's with a large degree of success. July 29, 2008 -- Jerry Yudelson today announced the beginning of a major new research study, "Energy Efficiency and Green Building Business Opportunities," for the St. Louis, Missouri-based National Association of Electrical Distributors (NAED) Education & Research Foundation. Green Building Consultant, Jerry Yudelson, "Green building and energy efficiency markets are growing by leaps and bounds, more than 50 percent per year. We're taking a long look at the potential for major new technologies and new business opportunities in the electrical equipment side of the green building industry." Citing industry statistics that show nearly 75

The trend for mega-distributors reporting growth continues. Wesco reports growth for second quarter 2008 at a time when many distributors are reporting down years. Since the construction industry is "in the tank" one can only assume that Wesco's Integrated Supply initiatives contine to gain traction.. WESCO Sales Grow 4.6% in 2Q WESCO International, Inc., Pittsburgh, PA, provider of electrical MRO products, construction materials and advanced integrated supply services, reported sales of $1.59 billion for the second quarter 2008, an increase of 4.6% over second quarter 2007. Profit was $60.1 million, a slight increase over the same period a year ago. Sales for the six months ended June 30, 2008 were $3.05 billion, a 2.8% increase over the first six months of 2007. Sales growth was 4.6% after adjusting for a previously announced divestiture. Profit for the 2008 year-to-date period was $105 million, a 2.6% decrease from same period last year.

Integrated Supply and related supply contracts are something every distributor and their partners need to prepare for in the future. Distributors have been on the front line of the integrated supply initiative. The large national wholesalers have a bit of a leg up on the rest because of their ability to provide consistent pricing and unified billing across many facilities and large geographic areas. But often the national distributors miss the mark on service, especially on technically-based products (Automation, Motion Control, Sensors and other lines). SupplyForce and Vanguard National Alliance have come up to meet the challenge on behalf of the smaller independent regional and local distributor. Clearly this is an area where distributors and their vendor partners need to work to make the flow of products as seamless as possible for the customer. More details from the report: Recently (7/22/08) Frank Lynn & Associates released the results of their latest study on Integrated

PTDA (Power Transmission Distributors Association) style distribution accounts for a large and growing segment of the Automation/Motion Control type of business. Early this summer we contributed an article to Automation.com which disclosed the research conducted by River Heights Consulting. According to our numbers PTDA did over $800 Million in Motion Control business. This demonstrates a fact that many of us have known for a long time, the manufacturing community in North America doesn't want a half dozen seperate suppliers (electrical, mechanical, hydraulic, motors, safety, etc.). They want one company capable of providing solutions. Here is a related announcement from PTDA: New Motion Control Technical Conference Provides Learning Opportunity for Technical Specialists Chicago, Ill. – July 24, 2008– The Power Transmission Distributors Association (PTDA) will present the first Motion Control Tech Conference at the 2008 Industry Summit in Miami Beach, Florida on October 31, 2008

Distributors around the country are reporting mixed results. Before convincing yourself the whole industry is tracking downward, you should check the latest results of a few of the big boys. Motion Industries just reports a 7% sales gain. Grainger 10% sales gain. I invite my readers to take the recession proof pledge. "I promise to make sure my competitors have a recession - not me" Motion Industries Sales Up 7% in 2Q Genuine Parts Company, Atlanta, GA, reported sales of $2.87 billion for the second quarter ended June 30, 2008, up 4% from the prior-year period. Profit for the quarter was $133.1 million, up 2%.EIS, the Electrical Group, recorded sales growth of 11% for the quarter. Motion Industries saw a sales jump of 7%. And the Automotive Group reported a 2% sales increase. S.P. Richards, the Office Products Group, reported flat sales relative to the second quarter last year.For the first six months, sales were $5.61 billion, up 4% from the same period in 2007. Profit wa