Global Fastener News

NFDA: Large Distributors = Fewer Suppliers

Larger fastener distributorships have fewer vendors, according to National Fastener Distributor Association’s online benchmarking program.
Distributors with annual sales exceeding $15 million average 232 vendors, Mike O’Shaughnessey of iLumen Financial Information Network told the NFDA. Distributors with sales under $15 million average 460 vendors.
Smaller distributorships report higher margins on fasteners, he noted. Overall gross margins average 35% with no participating distributors as high as 60% or as low as 20%.
Distributors’ operating profit generally ranges from 4% to 6%, O’Shaughnessey reported. For 2007 smaller distributorship revenue averaged a 7.4% increase vs. a 6.4% reduction for distributors will sales topping $15 million.
So far 30 NFDA member companies have participated on some level in the iLumen benchmarking. A total of 24 NFDA distributors provided fiscal 2007 information.
The NFDA unveiled the online service for receivables, inventory turns and other company comparisons last fall.
Additional benchmarking will be added, such as a compensation comparison in 2009.
iLumen measures 15 major industries, from manufacturing to health care. More than 15,000 companies participate.
For NFDA information contact executive vice president John Hausoul. Tel: 312 527-6671 Fax 312 673-6740 E-mail: nfda@nfda-fastener.org Web: nfda-fastener.org
iLumnen is located at 1375 Spring St., Atlanta, GA 30309. Tel: 404 446-1609 Fax 404 446-1635 Web: iLumen.com
Mather: Ask Tough Questions
Accountant John Mather, a BKD partner with 17 years of experience, said the key to surviving the current economy is “watching costs.”
“Keep watch over suppliers, customers, employees and even bankers,” Mather advised NFDA members. “Ask tough questions.”
Mather noted that U.S. production dropped 9% during the last recession.
Changing business includes customers moving overseas and new production methods.
Mather predicted the capital gains tax will go up under the next administration no matter who wins. Currently averaging 15%, Matter anticipates rates will be somewhere between 20% and 28%. �2008 FastenerNews.com