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12/09/2014

The Profitability Yo-Yo

By Dr. Albert D. Bates, Profit Planning Group

The 2014 Distributor Profitability Trends Report has just been completed by the Profit Planning Group. The report, which was expanded to include 34 different lines of trade, highlights an up and down pattern to profitability going back five years.

During 2013 (the last year for which complete information is available), distributors, as a group, experienced slowing sales growth which lead to an increase in expenses as a percent of sales. That problem was more than offset by an increase in the gross margin percentage. The net result was a slight increase in profitability.

Despite the increase, the results do nothing more than continue a pattern of a profitability increase in one year followed by a decrease the next. This up and down pattern suggest that real profit improvements are still somewhat illusory.

Review the key findings from the analysis.

End Of Year Profit Report

Download Data File In Excel Format

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