Compared to last year, how do
you see mergers and acquisitions
affecting other distributors?
CHALLENGES, TRENDS & THE ECONOMY
BY ANNA WELLS
When it comes to industrial distri- bution, day-to-day challenges abound. While many of these
issues are here to stay, as the landscape for
distributors shifts, so do their primary concerns. This year, the number one concern
was once again price competition, which
nearly 54 percent of respondents identified
(Figure 2, page 24). Other top concerns
include economic conditions (48 percent),
distributor competition ( 37 percent), and
finding more qualified people ( 31 percent).
Last year, economic conditions also ranked
second, but it has dipped a few points from
the 52 percent of respondents who identified this last year. This category peaked
as an industry concern during 2009 where
it was ranked “primary” by 70 percent of
respondents. The lowest level of economic
concern in the recent past was in 2006,
when only a quarter of respondents expressed concern.
We’ve again seen incremental increases
in the level of concern distributors have
over e-commerce. In the early 2000s, those
identifying this area were in the low single digits,
but started to rise in 2009, when ten percent said the
same. This year, 20 percent identified e-commerce as
a top concern, up from 17 percent last year. “Finding
more qualified people” is also up a few points over
last year, a category that’s been trending upward
since hitting a low point ( 15 percent) during 2009’s
peak unemployment. Write-in concerns included
things like port strikes, government regulations, and
“multiple distribution channels for the same prod-
When it comes to managing their businesses
against these issues, most distributors in our survey
plan to counteract these challenges with growth
strategies like growing sales among exiting cus-
tomers (77 percent), adding to their customer base
(64 percent), and taking market share from specific
competitors ( 33 percent). These growth strategies
have held fairly steady over the past year. Growth via
“internet sales” has continued to appeal to distribu-
tors, reaching 25 percent (from 24 percent last year,
and 18 percent in 2013). Areas that are low on the
growth strategy list include:
• Attending more conventions/trade shows.
• Charging fees for services.
• Diversifying into non-distribution businesses.
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