Views
1 year ago

SUMMER 2022

  • Text
  • Wwwgraphikacreativecom
  • Industrial
  • Threaded
  • Distributors
  • Bolts
  • Continued
  • Association
  • Manufacturing
  • Products
  • Fasteners
  • Fastener
Distributor's Link Magazine Summer 2022 / Vol 45 No 3

54 THE DISTRIBUTOR’S

54 THE DISTRIBUTOR’S LINK Nelson Valderrama Nelson Valderrama is the CEO of Intuilize, a software Service platform that specializes in helping mid-sized distributors transform data into profits. With more than 22 years’ experience as P&L manager executive for major PE firms and industrial distributors. Nelson has dedicated his career to help business uncover hidden competitive advantages and unleash the power of data in the new Digital Economy. For more information contact by email nelson@intuilize.com or visit www.intuilize.com MITIGATING INFLATION’S IMPACT IN YOUR DISTRIBUTION BUSINESS The US produces and consumes more than ever before, but inflation has been sleeping for a long time. In 2021 alone the Producer Price Index rose by four times as much compared to previous decade’s levels . In both cases - cost-pull or demand driven-- there are two forms: one where higher inputs cause rises in product prices; another happening when people keep demanding things without enough supply available on markets, so they start price gouging. Cost-pull inflation is currently evident across global supply chains, with the rising cost of everything from raw materials (e.g., metals +26%, wheat 50%) to energy (+110%), transportation (transpacific container 300% air freight 20%). And it’s not just companies that are feeling this pressure; even “unskilled” labor in many markets has become competitive and disruptive because so many other players want their piece too! There is a high possibility that inflation will continue to erode the value of currencies, and this trend could even accelerate. Even if overall costs level off for now there will still be unpredictable price spikes in certain essential items such as food because supply can suddenly get interrupted by unplanned events. Inflation is not a magical thing that can be made to disappear with the wave of one hand. However, there are steps you could take in order protect your company from this economic decline and its effects on operating CONTRIBUTOR ARTICLE margins- opportunities for profit protection exist across all aspects of distribution. Streamline Your Products Portfolio It’s all about cutting out the unproductive SKUs from your product portfolio so you can focus on those that are paying off. Streamlining your process and reducing input volumes can help you place larger orders with suppliers but also focusing capital efforts towards developing only those items that offer superior returns is an efficient way create growth opportunities within one’s business while also ensuring they are staying ahead of trends where others may become complacent. With a product catalog as large and diverse as fastener distribution (anything between 10,000 to 150,000 SKUS) it’s easy to see how managing each SKU can take up valuable time. In order to not lose your focus on what really matters - selling productsyou need an effective way of organizing them so that everything has its place without getting out of control! Which Products Generate The Most GM$ 50% of the GM$ is coming from less than 15% products. A recent study analyzed millions transaction data for distributors and found that 50 percent comes from just a few select products. CONTINUED ON PAGE 136

THE DISTRIBUTOR’S LINK 55

SHARE A PAGE FROM THIS MAGAZINE

OPTION 1: Click on the share tab above, or OPTION 2: Click on the icon (far right of toolbar) and then click on the icon (top right of the page).

Copyright © Distributor's Link, Inc. All Rights Reserved | Privacy Policy