FALL 2020

162 THE DISTRIBUTOR’S

162 THE DISTRIBUTOR’S LINK NELSON VALDERRAMA IS YOUR BUSINESS BENCHMARKING ITSELF TO TACKLE COVID-19? from page 140 After looking at Fastenal in detail and comparing with Grainger empirically, we can say that both companies are experiencing a margin pressure around 200 basis points in Q2 — so how can this be translated or company? Look at how your pricing and GM% performed in the last six quarters compared with these big companies, and: [1] See if there are any similar trends that can provide insight for where you may be headed [2] If you have GM% pressure, do you see a 200 basis point drop or more? If so, find out what is causing this!! Looking Back to Look Forward… One common question is how to benchmark performance against last year. To help, we’ve aggregated the real March-July sales data from our user base and put it into a report (see below)— to see how other companies like yours are faring during the pandemic. Benchmarking is All About Improving Performance Benchmarks provide reference points against which you can measure your performance. These can be internal metrics, objectives, or most frequently, performance measures of competitors or similar companies. Let’s keep in mind that these benchmarks are useful only if you attempt to improve processes in some way to see if costs can be reduced, profits can be increased, and customer loyalty can be strengthened. Some areas of interest to create benchmark can be: ¤ Financials – Sales, GM%, Operating Expenses, ROI, ROE, GMROII, etc. ¤ Customer Satisfaction – Overall satisfaction with a product, satisfaction with different aspects of a product, the likelihood to recommend a product, the likelihood to repurchase a product. ¤ Cost and Effectiveness – The price of a product, the cost per application or use of a product, the cost of maintenance of a product, the savings that a product confers. ¤ Time – How long it takes to produce something, how quickly the phone is answered, the speed of response to an enquiry, the time taken to deal with a complaint. The report shows how the (theoretical) Company A compares to the rest of the market. Although internal year-on-year data has “noise”, you can still make empirical decisions during COVID-19. Once you establish a reliable benchmark for your peers’ pre- and post-pandemic sales numbers, you can compare that to your own performance. This will give you an empirical basis for evaluating both your performance against the market and the general effectiveness of your strategy. Don’t Fall Behind Because You Aren’t Equipped to Benchmark! Navigating this pandemic is an experience we’re all in together, and unfortunately for businesses, it is creating chaos the likes of which we never seen. At Intuilize, we’re committed to helping businesses like yours find clarity wherever possible, and benchmarking is a perfect place to start. There’s light at the end of this tunnel, I promise you that, but in order to get there, we need to have a clear vision of where we really stand. We’ll help you get there. NELSON VALDERRAMA

THE DISTRIBUTOR’S LINK 163 PWFA CONNECTING AT A DISTANCE: PAC-WEST/SEFA/SFA JOINT VIRTUAL CONFERENCE from page 88 Honorary Member Rick Peterson is now an honorary member of Pac- West. He is a past president of the association and has given a lot to Pac-West. Rick recently retired from All-West Components and Fasteners. of the program answered a lot of questions. A recording of the webinar is available free to Pac-West members by logging in to their member accounts and can be purchased by nonmembers. For more information about Pac-West and its activities, visit www.pac-west.org. USMCA The new United States Mexico Canada Agreement (which replaced NAFTA) was the topic for a webinar in September, featuring Jamie Lawrence (AVK), John Gaudette (Metric & Multistandard), and Chad Bussell (Wurth). A lot of great information was shared, and the Q&A part PACIFIC-WEST FASTENER ASSOCIATION