Distributors See Improvement in Profit Margins From 2008

December 04, 2009

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While 68 percent of industrial distributors saw sales down from 2008, a total of 65 percent of industrial distributors saw their profit margins increase or remain the same in 2009, according to a recent Industrial Distribution survey
, sponsored by Microsoft Dynamics.

In a survey of more than 300 respondents, 75 percent indicated that sales and marketing were areas where they saw improved efficiency when comparing this year to 2008. Customer service and support was the second area for improved efficiency, with 66 percent of respondents. Meanwhile, two-thirds said they plan to emphasize customer retention and reduction of lost sales.

In addition, 33 percent plan to put more money into technology in the near term. While fewer than half of distributors measure ROI of tech improvements, over 80 percent estimate payback of less than 24 months. Sales force automation, CRM and e-commerce were most frequently cited as future technology investment areas. E-commerce was listed as 'extremely' or 'very' important by nearly 50 percent of respondents.

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