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Power Transmission Distributors Association is...

the leading association for the power transmission/motion control industrial distribution channel, bringing together distributors and manufacturers.

Resources | Executive Management Resources | Financial Management

Financial Management

For a company to succeed, it needs to execute sound financial strategies that contribute to the bottom line and ensure future financial growth.

Strategic Pricing

“Customers don’t expect to pay less than market prices, but distributors often sell for less because they leave pricing decisions to sales people,” says Brent Grover, author of Strategic Pricing for Distributors™. Grover, of Evergreen Consulting, LLC, owned and ran a high-profit, large distribution business for over 20 years. Using that experience and his background as a CPA, he consults distributors on pricing, acquisitions and profitability. In PTDA's newsletter Transmissions, Grover discusses strategic pricing and he shares some of his tips on how to begin a successful strategic pricing initiative.

In this time of economic turbulence and great uncertainly, distributors are focused on the short term, and the number one priority for most leaders right now is to preserve cash and avoid risk. Brent Grover would argue that this is an obvious time to strengthen margin percentages.

Read Tips on Strategic Pricing for Distributors in Transmissions
2014, Volume 3.
Purchase Strategic Pricing for Distributors through the PTDA store.

Bending the Payroll Cost Curve

Read "Bending the Payroll Cost Curve" by Dr. Albert D. Bates, President, Profit Planning Group

The phrase "bending the cost curve" is widely used today, largely with regard to health care. That is, as a society, there is a need to slow the growth of the cost of providing health-care services. Bending the cost curve is also a useful concept for distributors, but it needs to be expanded.

PTDA members need to think in terms of bending the entire payroll cost curve, not just the health-care component. Simply put, the poor management of payroll costs is second only to inadequate gross margin as a barrier to achieving desired levels of profitability.

At the same time, payroll is not just an expense item like, say utilities. Payroll costs represent the employees who provide the services that allow the firm to generate adequate sales. Slashing and burning with regard to payroll is, at best, a counter-productive activity. The real task is to lower payroll costs relative to sales without diminishing any aspect of customer service.

This report examines the nature of the payroll challenge from two important perspectives:

The Long-Term Payroll Challenge: A discussion of the experience of distributors, including PTDA members, in controlling payroll over time.

Actually Bending the Curve: Some specific suggestions for improving payroll performance while maintaining employee esprit de corps.
 
PTDA offers solutions to meet your financial management needs. Use the navigation or visit the PTDA Store.