The results are in: Typical distributor sales, margins and
compensation all increased last year, and that’s some long-awaited good news
for our industry.
These numbers come from the 2012 NAED Performance Analysis
Report and the 2012 NAED Employee Compensation Report – two key benchmarks for
distributors looking to strengthen their businesses by gauging their operations
against their peers.
Both reports are stocked with valuable electrical industry statistics, such as:
- Typical distributor sales
jumped 16 percent between 2010 and 2011 – double the increase seen from 2009 to
- Median 2011 distributor margins reached 3
percent -- 1.6 percent higher than in 2010.
- Outside sales compensation increased 8 percent from our last comp survey in 2010.
If you haven’t already, I encourage you to order copies of
these reports. Then, use the data to:
progress – Compare your 2011 performance with years past to uncover
improvements. Explain to stakeholders how positive steps you took helped deliver
- Set goals
– Set your data against that of high performers to set numbers-driven goals
for the next five years. The benchmarks will also show you which areas your
peers are increasing investments in and where they’re cutting back.
vendor relationships – When meeting with vendors, use inventory and ROA
data as starting points for setting realistic common goals on sales and margins.
employees – Recognize your employees for any gains and then give them
something to strive for, using unmet benchmarks as targets. Also check the 2012
Employee Compensation Report to be sure you’re still paying them competitively!
- Take it
to the bank – or any other business partner that wants to understand how
profit is made in a high volume, low margin industry. Industry benchmarks like
PAR offer third-party support for showing what’s reasonable and typical.
Earlier this year, more than 200 NAED members took the time
to go back through their 2011 operations and respond to our questionnaires for
our annual PAR and bi-annual Employee Compensation Report.
I want to thank those distributors for participating. Not
only do they get personalized reports that go deeper into these findings, but
they’ve also done the industry a huge favor.
We’ll be opening the PAR survey period back up in January
2013. In the meantime, how will you use these benchmarks? Share your ideas with
the industry in the comments below.