Industry Contractor Supplies
How a NetPlus Member Grew Net Profits by 20.6% with NetPlus Rebate
Background
The data in this case study is actual, based on 2018 results from a NetPlus Distributor member. This case study illustrates the positive impact NetPlus Alliance has on a Distributor’s bottom line.
Challenges
Facing competitive challenges from national retailers like Home Depot and online pressures from Amazon, a NetPlus Distributor of contractor supplies has embraced the new digital realities of operating in today’s market. Like many independent Distributors, this NetPlus member knew that without a fresh approach, its margins would be squeezed. This second-generation company embraced e-commerce and a multichannel sales and marketing strategy. This member wanted to find a buying group as progressive as it was in the market and found the right fit with NetPlus Alliance.
Results
NetPlus membership was part of the Distributor’s larger strategy to come out ahead.
- Over five years, the Distributor’s NetPlus rebate has grown by 600% by increasing purchases with existing suppliers and converting product lines to new suppliers in NetPlus. It also added new lines it was not previously selling.
- From 2017 to 2018, the Distributor’s net profits were 20.6% higher with the NetPlus rebate.
- The Distributor’s net profitability has increased by 500% in five years.
To grow net profitability at the same rate without a rebate from NetPlus Alliance would have required this Distributor to:
- Reduce payroll expenses by 7.4%, or two to three people
- Reduce other expenses by 9.4%
- Increase sales by 20%; or
- Increase Gross Margin by 1.2 percentage points.
