Distributors Take Control of the Market
Sales revenue exceeded $2.5 billion for the 2004 BFL&S Top 100 Distributors.
The total of BFL&S' Top 100 Distributors revenue was $2.78 billion—18 percent higher than last year's $2.35 billion.
The $430 million increase in revenue was led by the largest distributors, with the top five companies increasing sales by $129 million. But, increases can be found throughout the entire Top 100 list.
IBSA (International Business Solutions Alliance) took the lead this year by increasing its number of affiliated distributorships from 61 last year to more than 100. Among the top five, Proforma, American Solutions for Business and Global DocuGraphix all reported healthy revenue increases, while Workflow dropped a bit.
Form sales for the Top 100 increased by $100 million to $844 million. However, because of the increase in overall sales, forms as a percentage of total sales dropped from 32.9 percent last year to 32.7 percent.
Top 100 label and tag sales rose to $287 million from $247 million in 2003, constituting a 16 percent increase. Labels as a percentage of total sales increased to 11.1 percent from 10.5 percent one year ago.
Commercial printing now accounts for 21.5 percent of total distributor sales, compared to 20.8 percent last year. Top 100 distributors sold $554 million in commercial printing, compared to $488 million in 2003.
Promotional products sales also increased in 2004 to $391 million, up from $345 million one year ago. Promotional products now account for 15.2 percent of total Top 100 Distributor sales.
Direct mail sales dropped this year to $117 million from the $141 million reported last year. Direct mail now accounts for 4.5 percent of total sales, down from the 6 percent reported one year ago.
Productive Employees
This year's Top 100 reported 9,009 employees—an increase of 14.4 percent over last year's 7,872 employees. Distributor locations increased by 10.6 percent to 1,758.
Productivity, as measured by sales per employee, decreased to $286,117, compared to $298,633 reported last year. Sales per location was $1.46 million, compared to $1.5 million one year ago. The Top 100's additional $129 million in sales was accomplished with 1,137 more employees at 168 more locations.
Top of the Heap
Share of market remained stable for the largest distributors, with the top 20 companies accounting for 72.3 percent of total Top 100 revenue ($1.93 billion). These 20 companies employ 6,517 people at 1,484 locations, for $295,798 in sales per employee and $1.3 million in sales per location. Last year, the top 20 companies employed 5,460 people at 1,370 locations for $313,645 in sales per employee and $1.3 million in sales per location.
The Top 10 Distributors gained in market share from 59.7 percent of the Top 100 revenue or $1.4 billion last year to 61.8 percent of Top 100 revenue—$1.59 billion this year. The Top 10 Distributors employed 5,338 people at 1,404 locations, accounting for $298,233 in sales per employee and $1.13 million in sales per location.
The Top 10 sold $504 million in forms, $187 million in labels and tags, $330 million in commercial printing, $305 million in promotional products and $39 million in direct mail.
Outlook
Top 100 sales for labels and tags, commercial printing and promotional products all increased this year, supplementing the increased dollar volume in forms sales.
Consolidation also continues, as the largest distributor companies are either acquiring distributorships or adding new members. The largest distributors are al-ready as large as the largest independent suppliers, and they will eventually grow even larger as they begin to take advantage of multi-million-dollar national contracts.
The $2.78 billion in Top 100 Distributor sales is on par with the $2.83 billion reported by the Top 100 Suppliers in the October issue. With the economy remaining steady at worst, the overall outlook points to continued growth in 2005.
By Bill Drennan and Heather Beachy
Note: All distributor sales charts provided in this issue were produced from information voluntarily supplied by the distributors who completed a BFL&S research questionnaire.