Tools of the Trade
Making use of a basic Excel spreadsheet is yet another means by which distributors can get ahead. According to Kegowicz, distributors can keep track of which markets tend to be most profitable by recording and evaluating low-margin and low-volume customers.
"I'm always in favor of trying to increase the percent return on sales as opposed to strictly going after volume," said Kegowicz. "Just take the customer list and look at selling price, cost, margin and overhead to calculate the return on sales."
By using this process, Kegowicz said that distributors can determine where to spend time and with which customers to exert more effort.
Enhancing one's business knowledge is another of Kegowicz's recommendations. This can be done through educational tools, such as courses offered through DMIA and the American Management Association. For small- to mid-size distributors, Kegowicz suggested attending laymen's financial courses. "One of the weaknesses of many small- and medium-size distributors is their lack of thorough understanding of a business operations' financial implications," he said. Courses like these, which are specifically offered for non-accounting professionals, are typically held at local colleges and universities.
In addition, reading books such as The One to One Future: Building Relationships One Customer at a Time, by Don Peppers and Martha Rogers, Ph.D., and Built to Last: Successful Habits of Visionary Companies, by James C. Collins and Jerry I. Porras, are helpful in advising how to build and maintain a lasting organization.
Being aware of what is occurring within the industry is also of utmost importance. "Know who the best printers are and what type of technology they are using," said Kegowicz. While referring to an industry periodical is one of the best bets for doing this, so is maintaining strong contact with large paper suppliers to the print industry, such as International Paper, Stamford, Conn. "International Paper usually knows who is operating the best, most sophisticated types of equipment," said Kegowicz.