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decisions at the end of 2013, any reduction or
leveling in price increases is welcome.
Additionally, some manufacturers have been
working with distributors to offset the unavoidable cost of doing business. Forty percent of distributor respondents indicated that their manufacturer-suppliers are lending a hand with new
product introductions, and 34 percent appear
to be receiving help in the form of cooperative
advertising and marketing efforts. Up two percentage points from last year ( 28 percent versus
26 percent in 2013), more respondents indicated
that they are receiving technical assistance from
manufacturers, and the number of respondents
who indicated that manufacturers are offering
easier return policies or are waiving restocking
fees is up three percentage points.
Respondents were also able write in how
their manufacturers are working with them.
A few replies indicated that rebates, quantity discounts, and value-added activities like
education were alive and well, but the majority
of these answers were “none,”“nothing,” or
“nothing at all.” The manufacturer-distributor
gap in the low margin environment of industrial
distribution seemingly remains as wide as ever.
Vending remains a split topic in the industrial
distribution landscape, with results falling in
line with those from 2013. This year, 25 percent
of respondents reported that they do install and
maintain vending machines at customer locations, up three percentage points from last year.
Of those individuals that do not currently install
or maintain machines, quite a large number of
respondents (85 percent) say they still have no
intention of participating in the trend.
These figures, while relatively unchanged
from last year, are a bit surprising considering
the success of vending in the marketplace. In
January of this year, Fastenal said that although
vending machine numbers did not meet expectations for 2013, customers now using or
deploying vending machine systems made up
over 36 percent of the company’s revenues.
Finally, our survey reviewed the global
business intentions of the readers of Industrial
Distribution. Last year, just over half of respondents indicated that they were already
doing business outside of the U.S., and that number has risen to 55 percent this year.
Thirty-nine percent of respondents this year indicated that they had no plans to seek
business on a global scale, down one percentage point from last year’s 40 percent. So,
while the number of distributors seeking business outside of the U.S. is growing, it is
not at an exponential rate. Perhaps companies would prefer to focus on the exploding hydraulic fracing and oil & mining segments right in their own backyards.