“Money for Nothing, and Benchmarking for Free”

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Dire Straights’ 1987 song “Money for Nothing” just blasted out of my office stereo – concert volume drives creativity. It put the gears into motion. Wholesalers today live in a charmed time. Oh, we hear plenty of negative stuff – the Recession, off-shoring, closing of US manufacturing and the like. But we have tools unlike any and all of our forefathers in the industry. They say information is money – and “now days”, we get it for nothing. Here’s my take on “Benchmarking for Free”.

So many of the folks I talk to deal in the industrial market – the great US manufacturing sector. The recovery is under way and their business is improving. The problem is they really lack any solid understanding of how much things have improved. Their business can be up 10% but they don’t really know if this is good, bad or otherwise.

To combat this I suggest you benchmark yourself against some of the public companies who serve the same market (in this case I selected Industrial but it could be any market). Create a Google Alert for each of the companies. When their current business trends are published you have benchmarking for free.

Here is my benchmark list for the Industrial Market (Second Quarter 2010 data):
WESCO - Electrical Wholesaler
Sales to Utility Market Down 10%
Sales to Industrial Sector Up 25%

Fastenal – Fasteners and Industrial
Sales to Manufacturers Up 30%
Margins are higher

DXP – Industrial and PT
Sales Up 15.9%

WW Grainger – Industrial
Sales Up 14%

Does this information provide a 100% accurate picture of the Industrial Market? No, there are things like growth through acquisition and the occasional Wall Street trick thrown into the mix. But it does give you a starting point for your own benchmarking.

My parting comment – If you are not enjoying mid-double digit growth from last year, you probably need to start investigating. If you are growing less than 10%, do it now. Somebody is silently taking away your business.

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