The National Association of Electrical Distributors (NAED), St. Louis, released its annual Performance Analysis Report (PAR) Highlights, which compiles performance data from NAED electrical distributors to provide a benchmark for distributor operations in the industry.
The report shows that electrical distributor profit margins increased to a median of 2.4% in 2010, compared to medians of 1.1% in 2009, 2.6% in 2008, 3.2% in 2007, and 3.7% in 2006. Among the top performing 25% of “high profit” distributors, the 2010 profit margin was 4.7%, consistent with last year's profit margin.
The report's author, Dr. Al Bates of Profit Planning Group, Boulder, Colo., offered insight into this year's results. “NAED distributors started the process of bouncing back from the recession in 2010," he says. "Sales were up a healthy 8%, gross margin held constant and expenses fell as a percent of sales. As a result, profits rose to 2.4% of sales, about where they were in 2008. Nobody is back to the good old days, but they are at least moving steadily in the right direction.”
PAR survey participants receive a free copy of the PAR Highlights. The report is now available to NAED member non-participants for $300 (first copy) and $20 (additional copies), as well as non-members for $495 (each copy). For more information about PAR Highlights, contact NAED Member Services at (888) 791-2512 or [email protected].
About the Author
Jim Lucy Blog
Chief Editor
Jim Lucy has been wandering through the electrical market for more than 30 years, most of the time as an editor for Electrical Wholesaling, Electrical Marketing newsletter and CEE News. During that time he and the editorial team for the publications have won numerous national awards for their coverage of the electrical business. He showed an early interest in electricity, when as a youth he had an idea for a hot dog cooker. Unfortunately, the first crude prototype malfunctioned and the arc nearly blew him out of his parents' basement. Before becoming an editor for Electrical Wholesaling magazine and Electrical Marketing, he earned a BA degree in journalism and a MA in communications from Glassboro State College, Glassboro, NJ., which is formerly best known as the site of the 1967 summit meeting between President Lyndon Johnson and Russian Premier Aleksei Nikolayevich Kosygin, and now best known as the New Jersey state college that changed its name in 1992 to Rowan University because of a generous $100 million donation by N.J. zillionaire industrialist Henry Rowan. Jim is a Brooklyn-born Jersey Guy happily transplanted in the fertile plains of Kansas for the past 20 years.