Volume 48, Issue 3 - May 2009
From the Editor
THE ISSUE AT HAND
Something So Small …
Many of you know I’m the mother of twin boys. Time has flown by since Clay and Owen were born and they just celebrated their sixth birthday. They have really astonished me by how much they have grown this past year—their first year in kindergarten. Not only can they count to 100 by ones, fives, tens and 20s, Clay seems to be the next Picasso and Owen the next Pele. I often ask myself, “How did two babies once so small grow up to be these little boys with such a future?”
I often think similar thoughts when working on feature stories like the Maintaining Margins feature in this issue on page 10. This feature, which was first intended to focus on whether or not distributors and dealers know at what price they can sell their products and still be profitable, turned into much more. It’s not just about prices and profit but it also tackles how distributors and dealers are competing with companies that are selling product at cost or below-cost and how they are staying competitive with value-added services.
I was struck by comments from two distributors on the subject of margins.
Jack Cortese, chief executive officer of Bridgewater Wholesalers in Branchburg, N.J., said, “There are companies selling at low numbers for what appear to be the same products. We have, for the most part, maintained delivery schedules, maintained inventory levels, continued our customer education processes, maintained our sales staff and have succeeded to maintain our short lead times … Unless strategically important, we will not chase numbers down.”
Dan Barber, vice president of finance and administration at Barnett Millworks in Theodore, Ala., said his company tries not to get caught in the “price game.”
Barber says Barnett Millwork tries to be as service-oriented as possible and think outside of the box “to provide the best possible product at the best possible price while providing before and after sales support to allow business partners to be successful.”
Companies allow that their margins have been affected in this market, but no companies I interviewed said that they were selling below-cost or at cost.
I’ll be wondering anxiously what you think and how the current economic climate has affected your company’s margins. E-mail me your thoughts at email@example.com.
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