Welcome to ElectricalTrends.
ElectricalTrends is a communications vehicle, offered to the electrical distribution industry, by Allen Ray Associates and Channel Marketing Group. The purpose of ElectricalTrends is to share Allen Ray Associates’ and Channel Marketing Group’s insights on industry trends, observations on industry activities and issues and ideas that may benefit industry participants in their endeavor to improve their businesses in the areas of growth and profitability.
For more information about ElectricalTrends' purpose, moderation policy and advertising policy email email@example.com
Monday, January 14, 2008
This excess is frequently caused by some “growth” oriented distributors opening locations where significant distribution already exists; national acquirers who decide to operate multiple brands and other acquirers who decide not to prune consolidated locations. There is the belief that the more locations, the more market share and revenue (or does this represent lack of confidence in a sales organization to capture business without a local presence and an inability to deliver frequently enough to the market? Is the “right” local inventory the key to success?)
Part of the challenge is the belief (or fallacy) that a “deeper” footprint generates more business (vs. cannibalizes the business). Another component is that manufacturers are willing to support all of their “major” distributors in all of their locations, which begs the question of “what is the value of an authorized location?”
Does your market have too much capacity? Have “bid project margins declined (vs. realized margins)?
Thinking about your market, with the prospects of slow growth, are there too many distribution outlets? Is price deterioration at a point where you feel we’re all headed to the bottom as far as acceptable margin is concerned?
Or do you think that the competitive market place will take care of too much capacity? Will national chains close under-performing branches, or even consider selling some branches? Or is there another solution that could be considered? Share your thoughts by posting your comment.