November 2003               return to the newsletter contents page

New Study Tells Distributors How to Survive the Manufacturing Exodus

A new study by Progressive Distributor magazine and Benfield Consulting shows that distributors recorded an average of between $250,000 and $400,000 in lost sales when their manufacturing customers moved out of the U.S. The study also indicates the average margin on lost sales was more than 21 percent.

Based on a comprehensive survey of a cross-section of industrial distributors, “The China Syndrome and the Effects on Wholesale Distribution” pinned down the types of companies ready to make the move to another country. For example, divisions of public companies with sales of more than $100 million were the most likely to move. Companies most likely to move also included those in the Commercial Machinery, Fabricated Metal Products, and Electronic and Electrical Equipment sectors.

“The exodus of U.S. manufacturers is the biggest problem facing industrial distributors today,” said Scott Benfield, the study’s primary author. “A careful reading of this report will provide distributors with practical advice on how to prepare for the future as the manufacturing base contracts further.”

Download the free executive summary of “The China Syndrome and the Effects on Wholesale Distribution” at www.progressivedistributor.com.

The complete study is available for $75. Purchase it online or by fax and receive a portable document file (.pdf) of the extensive study plus an easy-to-follow, step-by-step guide for dealing with the manufacturing exodus called “Prescriptions for Improvement.”