Out of any of the sections of the Survey of Distributor Op- erations, the Balance Sheet section might have the most weight assigned to it when looking at the overall health
of the distribution economy and how it compares to previous
years. This is an industry which values numerical evidence of progress very highly, made apparent by the high number of our readers tuning in to the earnings reports in our newsletter each week,
and the overwhelming response that we get each year when we
rank distributors by revenue for the Industrial Distribution Big 50
List in our Sept/Oct issue.
An industry that values numbers-based progress so highly might
feel like this year’s data leaves them feeling a bit defeated. From
the numbers alone, the results for the Balance Sheet section of
the 2013 survey are looking a lot like 2009, which feels like a step
backwards. More respondents reported decreased sales, decreased
profits, and expectations for decreased sales in the future.
Don’t throw this issue at the trash can just yet – there are some
positive data points to report as well.
The numbers look a lot different, in part, because last year they
looked so good. Last year, only five percent of respondents could
say that their sales had decreased, the lowest number in more
than a decade of survey results. In fact, only two years even came
close to that number: 2011, when things were on the upswing
after a hard road to recovery; and 2006, when the economy was
roaring before the big crash. Both years had only seven percent
of respondents declare a decrease in sales over the prior twelve
months, as opposed to years like 2008 and 2009, where 19 and 33
percent of respondents, respectively, indicated that their sales had
decreased compared to the year before.
This year, just over 16 percent of respondents said that their
sales decreased (Figure 1). While this is much higher than last
year’s five percent, it’s still a much better number than the ones
posted in 2008 and 2009. In comparison to last year’s 82 percent
of those surveyed, only 58 percent of respondents reported that
their sales increased this year, a number very similar to 2009’s. In
addition, the number of respondents whose sales remained approximately the same was only 13 percent last year, as opposed to
this year when one in four said the same.
Interestingly, the data for profit increases and decreases followed a similar pattern. Twenty percent of respondents said that
their profits decreased this last year, a total up nine percentage
points from 2012. Similarly, in 2012, 65 percent of those surveyed
had increased profits, while this year only 51 percent of respondents reported increased numbers. The number of people that
noted that their profits have remained the same is up five percentage points from last year. This could be attributed to the increased
Compared to last year, how have your sales
In terms of your expectations for next year,
how do you anticipate your sales to fare?
Sales will decrease