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DISTRIBUTION/WHOLESALE

Sales: According to the U.S. Census Bureau, merchant wholesalers’ sales were $366.8 billion in September of 2007, up 1.3 percent from the revised August level. Sales in September of 2007 were up 9.9 percent from the September 2006 level. The August preliminary estimate was revised upward $1.3 billion, or 0.4 percent. September sales of durable goods were up 0.3 percent from last month and were up 4.6 percent from one year ago. Compared to last month, sales of motor vehicle and motor vehicle parts and supplies were up 4.1 percent, while sales of metals and minerals, except petroleum, were down 3.7 percent. Sales of nondurable goods were up 2.1 percent from last month, and sales of farm product raw materials were up 5.2 percent.

Inventories: The U.S. Census Bureau indicates total merchant wholesalers’ inventories were $404.5 billion at the end of September, up 0.8 percent from the revised August level, and were up 5.2 percent from one year ago. The August preliminary estimate was revised upward $2.3 billion, or 0.6 percent. End-of-month inventories of durable goods were up 0.7 percent from last month and were up 1.3 percent from September of 2006. Inventories of computer and computer peripheral equipment and software were up 2.0 percent from last month. End-of-month inventories of nondurable goods increased 1.0 percent from August and were up 12.2 percent compared to September of 2006. Inventories of farm product raw materials were up 9.6 percent from last month.

Inventories/Sales Ratio: According to the U.S. Census Bureau, the September inventories /sales ratio for merchant wholesalers was 1.10 as compared to the September 2006 ratio of 1.15.

The following are simply a few topics both you and your IPA consultant can discuss in order to enhance sales and improve your distribution/wholesale business.

• Servicing Your Customers. Getting products to your customers, answering questions about delivery timelines and working with vendors to obtain new product lines are complex and demanding portions of your wholesale business. With the strong emphasis placed on "just in time" delivery services these days, a shipment delay could mean the end to a business relationship. It is important to keep customers informed regarding any status changes, pricing concerns and product movements from your company’s facility to your customer’s loading dock.
• Employees, Accounts Receivable and Other Financial Matters. It is crucial that wholesale business owners keep an eye on their companies’ books and expenditures as one oversight could mean the loss of hundreds of thousands of dollars and a missed payroll deadline could result in the halting of their entire business. It is also important to make sure that an investment is made in financial talent and services.
• Marketing. Even though many wholesalers do not utilize traditional advertising strategies, that does not mean you should not market your business to potential customers. As many wholesaling guides are published and distributed to retailers, a decent bulk of these marketing efforts will be directed towards the retail industry. Visiting with retailers directly, meeting with buyers and outlining your company’s services are also vital to building and maintaining relationships with clients.

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