Client Profitability Numbers

I specialize in working directly with wholesale distributors at their locations. To give you a flavor of my work with clients, here are a couple of examples of the territory sales training, sales and marketing management training, and direct consulting at work...

Company #1

Direct territory sales training, July, 2001. Refresher territory sales training, July, 2003, January, 2005. One day purchasing and sales management consulting programs, 2004. Refresher training for new hires scheduled periodically.

This is a large privately held company.

"Street" numbers only - non street business not included.

From June, 2001 to June, 2005:

• The Average street drop size has increased from $560.00 to $987.00.
• The GP% has increase from 14.5% to 17.9%.
• The GP$ per stop has increased from $81.20 to $177.00.
• The "line in the sand" (cost of making a delivery in total operating expenses) has increased from $92.00 to $103.67.
• The direct contribution to pretax by average order size has increased from <10.80> to 73.33 (Currently running at 7.43%.)

MANAGEMENT COMMENTS:

"In 2001, if it wasn't for sheltered income, we would have gone broke. Frankly, we didn't do much with the training, until the second time around - but saw some results from the sales force after the first session. We went heavy into all aspects - sales, purchasing, addressing the little accounts, in 2003.

On June 1, 2005, we had a record sales day. However, total deliveries were down about 20% from the same date in 2001. Besides selling a broader mix of products, the increase in GP% also reflects the work that the purchasing people have done to reduce our cost of goods. We have capitalized on efficiencies throughout the organization. We finished this fiscal year (6/30) at a 5.98% pretax.

However, we know we could have done better. A problem exists with some of our national accounts. The GP$ per stop aren't there, and the buy side and opportunity for back hauls, isn't picking up the slack. As a result, we're aggressively trying to negotiate larger drops. If we can't, we will be resigning some of the business, and cutting back on expenses. We may downsize sales volume a bit, but pretax will go up."

Company #2

Direct territory sales training, August, 2004. Management consultative overlay in September, 2004. Following are 1 June, 2005 numbers:

$32,000,000 in volume.

• A 2.3 line increase in lines per invoice.
• An average sales price of $28.00 @ 18.0% on the new business.
• An average of 2.1 cases per new invoice line, concentrating on items the customers order every week.
• The average drop size has increased $135.00.
• The average GP$ per stop has increased $24.00.
• Due to aggressively addressing the "sludge" accounts, the number of deliveries is down 8% to the same period last year.

MANAGEMENT COMMENTS:

"Small accounts were killing us, due to chasing sales. (We were stopping a truck for one case!) It was hard at first to change our way of looking at our business, but we're tracking to a 3.2% pretax this year. Considering that we were losing money two years ago, that's quite a change.

We put a new commission program into place January 1st, based on GP$ per stop. The reps are making more money, and are really into the one new item game. Purchasing has been working on our breadth of line and product mix. A lot of slow moving items we thought would sell and didn't, have been replaced. New items that are moving, have been brought in. Inventory asset turnover has been improved dramatically."

As typical with many long-term clients, I have been contacted periodically by both of these companies, to provide advice on internal management matters, and to provide additional training when needed.

TOP

Management consulting, time and territory management training, territory sales training, sales management training, purchasing and marketing training, and broker and sales agent training, in the wholesale distribution, foodservice distribution, and manufacturing communities