Study Finds SPAs Spreading in Market

Recognizing that SPAs (special pricing authorizations) are prevalent within the electrical industry and can be critical to the profitability of distributors, Allen Ray Associates, Kennedale, Texas, and Channel Marketing Group, Raleigh, N.C., recently conducted an industry survey to better understand the state of the SPA market.

More than 100 distributors throughout the industry, representing various sized distributors, responded to the survey. Some of the key results included:

• 33.3 percent of respondents have more than 250 individual customer-defined SPA agreements. Another 13.6 percent had more than 100 SPAs.
• 60.6 percent of respondents feel the number of SPAs they negotiate will increase. Only 9.1 percent feel that they will eventually have less SPA agreements.
• Concerning profitability, distributors ranked SPAs as a 7.64 on a scale of 1-10 in importance to their current and future profitability.