 Rich Vurva Editor/Publisher |
Weathering the storm
by Rich Vurva
Even the most optimistic distributors are anticipating that 2009 will bring plenty of challenges. In a recent survey of Progressive Distributor readers, 45 percent expect their company’s sales to decrease this year. Thirty percent said sales will remain the same as 2008 and only 25 percent anticipate a sales increase.
Distributors are pulling out all stops to manage their way through the current economic downturn. Eight-four percent said they’re aggressively pursuing new business, while two-thirds are carefully reviewing costs and expenses. About 23 percent are planning or have already initiated employee layoffs.
The recession has prompted some companies to come up with creative ways to lower expenses and boost sales. For example, one distributor executive said his company is considering consolidating back-office functions such as billing and shipping with a non-competing distributor. Another instituted a 36-hour work week with staggered employee start times and is creating an online store to go after new sales opportunities. Some are temporarily cutting salaries or lowering base pay in favor of incentive-driven compensation, spending cautiously and keeping a close eye on accounts receivables to make sure customers don’t fall too far behind.
Smart managers say they’re increasing efforts to keep employees informed about the steps they’ve taken to get through the tough times, particularly with young employees who have never experienced a recession. Others say they’re striving to strengthen close relationships with key customers to help them maintain their own costs and increase their productivity.
The best advice for weathering the storm came from the distributor who said he’s trying to maintain a positive attitude to keep employees and customers motivated. “The market has soured, but we are not done making a positive impact.”
This editorial appeared in the January/February 2009 issue of Progressive Distributor. Copyright 2009.
