Distributors Continue To Excel

The surprise with this year's Top 100 Distributors is that there was no downturn. With all of the economic difficulties and harsh realities and stock market woes, guess what? Distributors found a way to maintain revenue.

The Top 10 distributors on this year's list posted combined total sales of $1.23 billion, an increase of $55.5 million or 4.7 percent over last year. These same companies reduced their combined workforce by 846 people, increasing sales per employee from $249,148 to $319,481.

Does this translate into higher profits? Not necessarily, but the additional $70,333 in sales per employee indicates that these companies are making every effort to hold on to profitability.

If there is one difference this year, it is a decline in forms sales. For several years, even though the percentage of overall Top 100 sales held by forms has decreased, the dollar value of forms sales has risen. This year form sales decreased by 4.6 percent to $793 million. Commercial printing sales were essentially flat at $484 million while direct mail sales increased by 27.3 percent to $135 million. Label sales grew 13 percent to $218 million and promotional product sales gained 7.7 percent to $238 million.

Industry consolidation also continues as smaller distributors seek the protection and buying power of the larger sales organizations. Others see the sale of their businesses (usually over time) as a viable retirement option.

Overall, the industry has responded to economic strictures by becoming leaner, more diverse and more productive. When the rebound arrives, the distributor sales machine will be finely tuned to take advantage of an expanding marketplace.

Bill Drennan

Editorial Director

bdrennan@napco.com