The National Association of Electrical Distributors (NAED), St. Louis, released its annual Performance Analysis Report (PAR) Highlights, which compiles performance data from NAED electrical distributors to provide a benchmark for distributor operations in the industry.
The report shows that electrical distributor profit margins increased to a median of 2.4% in 2010, compared to medians of 1.1% in 2009, 2.6% in 2008, 3.2% in 2007, and 3.7% in 2006. Among the top performing 25% of “high profit” distributors, the 2010 profit margin was 4.7%, consistent with last year's profit margin.
The report's author, Dr. Al Bates of Profit Planning Group, Boulder, Colo., offered insight into this year's results. “NAED distributors started the process of bouncing back from the recession in 2010," he says. "Sales were up a healthy 8%, gross margin held constant and expenses fell as a percent of sales. As a result, profits rose to 2.4% of sales, about where they were in 2008. Nobody is back to the good old days, but they are at least moving steadily in the right direction.”
PAR survey participants receive a free copy of the PAR Highlights. The report is now available to NAED member non-participants for $300 (first copy) and $20 (additional copies), as well as non-members for $495 (each copy). For more information about PAR Highlights, contact NAED Member Services at (888) 791-2512 or [email protected].