Paralyzed or Planning to Profit?

In talking to distributors as they plan for 2010 we’ve noticed that distributors are following into two camps

• The first is a large group of distributors that seem paralyzed by the marketplace. They either don’t have confidence in themselves, their company or their local markets, hence are not developing any strategies to grow their business. In a number of these instances, the companies have operational improvement opportunities but are not taking advantage of them. The challenge? If you don’t have a plan to improve profitability and a plan to grow (at least eventually), then, in the words of a friend, “sometimes deer in the headlights get hit.”
• The other group is cautiously optimistic. They have a good handle on their operations, are continuously looking to improve their profitability through process improvement but are also identifying areas to grow their business. In many instances this will be through better account penetration coupled with targeting selected niche areas which could be meeting unmet service needs or getting into new markets. This group expects there to “be a tomorrow” for them.

Over the past week we’ve accumulated some info regarding growth activities that may interest you:

• Thomas & Betts has recently introduced a Wind brochure. Those looking at renewable energy markets should identify what their current suppliers may offer (at least you’ll already know the company.)
• Van Meter Industrial found two ways to grow sales and profits. First, they worked with their town to secure land for a building (and at a very good price) to replace a small branch and then got the city to approve a tax abatement ($202K) in exchange for a $1.5 million investment. Secondly, they joined the IDC-USA marketing group to improve their access to power transmission products as well as pricing and back-end rebates. And they theoretically expanded their product offering by 200K SKUs (more SKUs, more sales). Perhaps there are other marketing groups and/or associations you should belong to to expand your reach and profitability. (And check out the pink hair on their website!)
• The Strategies in Light conference just sent out their conference brochure. If you are involved in, or want to focus on, LEDs, this is a must conference. Feb 10-12 in Santa Clara, CA. Go to www.strategiesinlighti.com to see the agenda. It’s packed with everything you’d want to know about LEDs. Ted Konnerth from Egret Consulting will be speaking on the cultural differences between the birthplace of LEDs (electronics) and the electrical lighting / distribution industry. LEDs, albeit in the embryonic stage, will be a major revenue source in the future.
• Swift Electrical appears to be gaining traction with Trade Service’s Supplier Xchange online quotation system. They are advertising it on their website (and they have a nice looking site). Sometimes services can differentiate distributors (making one easier to work with than another). And this is a free service from Trade Service!
• Think resi is dead. Much of the new home construction market is, but according to this article on CNN, “in October, remodeling spending increased 8.7% compared with September to an annualized rate of $114 billion.” The remodeling market could represent an opportunity! Do you know the local remodelers and your customers that do remodeling work?

So, two questions:

• Which camp are you in? Paralyzed or planning to survive and thrive?
• What growth strategies are you considering?