Industry Industrial Supplies
How a NetPlus Member Grew Net Profits by 16.4% with NetPlus Alliance
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
Industrial distributors are facing rapid change, challenging distributors to innovate – or fall behind. To beat competitors with scale like Fastenal and new entrants to the market like Amazon, distributors need to be price-competitive and have access to opportunities with the right suppliers. And those are just the table stakes of competing today.
This regional distributor of industrial supplies is always evolving to meet its customers’ needs, including a more recent focus on product diversification, including safety. NetPlus has played a key role in helping this distributor access the right suppliers and terms, as well as product and sales training to support the distributor’s diversification strategy.
Results
This distributor has grown its rebate by 300% with NetPlus Alliance and its net profits by 16.4% since joining in 2014 through:
- converting existing product lines to NetPlus preferred suppliers;
- leveraging NetPlus’s supplier base to diversify its product offering;
- attending the Annual Meeting each year;
- sending sales reps to regional product trainings; and
- working closely with the NetPlus team, who ensures the distributor is getting the rebates they are entitled to.
As its purchases through NetPlus Alliance have grown, so has its rebates.
To grow net profitability at the same rate without a rebate from NetPlus Alliance would have required this distributor to:
- Reduce payroll expenses by 4.0%, or 1-2 people;
- Reduce other expenses by 5.1%;
- Increase sales by 6.5%; or
- Increase Gross Margin by 1 percentage point.
