10 Ideas for Planning for Profit in 2009

The current economic environment is creating challenges for many distributors. The burst in commodity prices has significantly impacted distributor gross margins as they have rushed to move higher cost inventory. The financial effects of selling something for less than you purchased it for can turn a good year into a mediocre one (and for many, overall margins for the last couple of months of 2008 dropped 2-5%!)

In an effort to react, most distributors have made operational changes … closing stores, increasing focus on expense management, pruning (or in some cases having RIFs) employees, cutting inventory and more.

Not knowing the future (nor believing the pundits), distributors are hunkering down in an effort to have profitability in 2009. Some recognize that there are also growth opportunities.

Late last year, Channel Marketing Group and Allen Ray Associates developed a webinar presentation entitled “10 Ideas for Planning for Profit in 2009“. This high level, conceptual, presentation was shared with over 50 distributors from a couple of marketing groups at the end of last year and earlier this year. We offer it as an idea-generator. Some of the principles also apply to manufacturers and to rep organizations. At the conclusion of the presentation is an offer that we have made, which we will continue to honor to those interested.

While the outlook for 2009 may be dismal for some, it is important to remember:

• Economists don’t have crystal balls
• For 99% of distributors, their economies are local economies. National statistics don’t mean anything.
• Opportunities do exist.
• You can’t manage your business a year at a time. Consider shorter timeframes to manage expenses while investing in the “right” revenue generation strategies.
• Businesses and consumers still need electrical materials

We hope you enjoy the presentation and that it stimulates some ideas. If you would like to discuss it or want to schedule a short presentation for your staff, give us a calll or drop us an email (David, Allen).

And sharing your thoughts on the presentation or what you are doing to make 2009 profitable would be most appreciated.