The Distributor Channel

Employee Enhancement Everybody says, “Our employees are our biggest asset.” But in the world of distribution the truth is our employees really are our biggest investment.   According to the Profit Analysis Reports generated by distributor associations, payroll cost represents somewhere between 60 and 65 percent of our total spending.   We’re not just “whistling Dixie” when we make the claim, it’s totally true.   But sadly, very few distributors create a real plan for maintaining or improving this investment.   If we were talking buildings instead of people, rust, decay and rundown would be the descriptors in play.   Most of us hire top talent, and then we rely on our hires to keep up with changing times.   Computer skills, inventory management techniques, and sales process are left pretty much to the individual.   What’s worse; along the way, only a few of us take the time to assist the employee in their development via a formal review. According to new research presented in

Detailed Expense Budget  A llow me a couple of Bold Statements: ·          Salespeople hate budgets.   I don’t know why this is the case.   But after three decades in the selling business, the evidence continues to pile up.   Whether they fear accountability, find the process tedious, or can’t stand a couple of hours staring at a spreadsheet – it just appears as though most shirk this duty. ·          The Top Brass of most distributors came up through sales.   And, guess what?   They still hate budgeting.   As strange as it may seem, I continually run into distributors without a detailed expense plan for the coming year.   When budgets exist, they commonly are a product of the accounting side of the business, without solid input and support from the other sides of the house.   Ouch… The best annual distributor plans call for not only a forecast of incoming sales and gross margin (which we’ve covered), but also predict operating expenses in the coming year.   Over the y

The Who, What, Why Sales Budget In case you haven’t noticed, we distributors are in the sales business.   Now I realize there are a bunch of you who are starting to raise your hand with questions like: What about our inventory department?   And aren’t distributors really involved in the logistical world? Both of these are valid arguments.   However, without sales, the distributor world comes crashing to a halt.   If sales are not predictable, and budgeted for, all of the good inventory practices in the world will be for naught.   We believe arriving at a solid estimate of next year’s sales and gross margin is critically important to your plan.   Actually gross margin dollars are more important than sales numbers in the distributor world but, developing both allows for better communication with supply partners who deal only in sales. Most distributors take a shot at their forecast by pulling out some growth wish – 8, 10, 15 percent are commonly tossed out.   This becomes