0 10 20 30 40 50 60
Set up new branches
Do business overseas
Add product lines
Hire more employees
Drive traffic to website
Sell more via web/
Which tactic would you consider very important for
growth and business development?
Besides economic factors, there are some
customer relations issues that can create a
shift in the dynamic — and also, an erosion
in profits. One such issue that distributors
tend to become snarled in – often to their
detriment – is that of terms and conditions.
In an interview earlier this year, Richard
Reffler, president of the electrical and
industrial distribution divisions of Big 50
distributor Turtle & Hughes, suggested
that terms and conditions are becoming so
sophisticated that some customers are pre-
dicting interest rates out nearly 18 months.
The result is they are trying to negotiate
extended payment terms, leaving the dis-
tributor wondering whether they should be
acting more like a bank. On average, our
respondents say their payment terms work
out to be 31-40 days ( 34 percent) or 41-50
days ( 33 percent). Nine percent describe the
time frame for their payments and receiv-
ables as 61 days or more, which is as high as
its been since 2009. What’s further alarm-
ing is that, of this group, more than two
percent say their time frame is 90 days+.
In 2013, this group was comprised of less
than half a percent of all respondents.
On a positive note, 25 percent of survey
respondents say they get paid within 30
days, which is a slight improvement over
the last three years reported, which were
all closer to 20 percent.
Our survey also asked readers of
Industrial Distribution which tactics they’d consider to be very important for growth and
business development. Just like the last
few years, “Advertising and Marketing”
topped the list, with 52 percent saying
they planned to focus efforts in this area
(Figure 3). Adding product lines, selling
more through the website, and improving/
redesigning the website are also strategies
that respondents suggest were of critical
importance. Lower on the scale of priority
are areas like doing business overseas —
which 12 percent of our respondents said
they considered to be very important. Also
of less importance were setting up new
branches and hiring more employees.