I like to describe NAED’s PAR Report® as your financial report card at the end of the year. It can help you dig deeper into the decisions that you made last year and how they affected your entire financial portfolio from expenses and sales to payroll and headcount.
Not only are you able to look at your company’s results, but the report provides a way to measure your performance against others in the industry on an aggregated basis. The data in the NAED’s PAR Report® shows others within your organization how you may differ, or operational areas that may need some improvement. How? It provides critical benchmarks for distributors' key financial categories that make a difference to your bottom line. Members can view additional breakouts for sales volume, customer emphasis, number of locations and regions which provide further comparisons to other companies in those same buckets.
This year’s report also includes information regarding PPP loans, layoffs, furloughs, and percentage of sales by quarter for additional analysis. It is so important, now more than ever, to look at this data not only from a yearly perspective, but quarterly too. I recently heard from several members how their companies aren’t just planning on a yearly basis, but also reviewing their business more often throughout the year.
According to the report, which measured performance in 2020, the typical respondent noted a negative sales decline of 1.5% and a 4.0% profit margin. The typical distributor’s return on net worth was 18.8% in 2020. This is a slight increase from the average respondent’s rate for 2019, which was reported as 18.7%.
Sales through e-commerce were the highest it’s been since we started tracking that metric. This makes sense given that members needed to keep the industry moving and this is one channel that provided the means to service customers 24/7.
We also asked about the percent of sales attributed to services. For example, distributors who have over $350M in sales attribute almost 4% of their annual revenue in services. If I were a distributor looking to gain other sources of revenue, services may be the area to explore further, perhaps even expanding the services I offer.
Those are just a few examples of the results found in the report! While there were some things that surprised me, overall, it all made sense considering the challenges of 2020. As the world faced major shutdowns last March, and other industries reported double digits or more in losses, our industry did well overall, stepped up to the essential business expectations, and pivoted nicely to keep people safe and working best they could. You can really see that in the quarter-over-quarter breakouts as sales for the industry dipped and rebounded. Many seized the hot opportunities and even increased their revenue in certain segments.
View even more breakouts by purchasing your copy of the NAED PAR Report®. Contact NAED’s Member Engagement Team today!
Also, join us for a webinar on August 11th as I'm joined by Scott Hackworth, President & CEO of Industry Insights and Mark McGready, Independent Data Insights Advisor for NAED and Director of Strategic Analytics for SPARXiQ, as we discuss our top insights from this year’s NAED PAR Report®.
Register here to attend. Even if you are unable to join us, please register and we’ll provide you access to the recording.
Erin Prinster
Erin Prinster is a Research and Data Analyst with more than 17 years of experience in analyzing the business needs of corporations and customers. She manages all phases of data collection and analysis for NAED research projects, including the application of standard, descriptive, and statistical methods for conducting analysis. Her passion is using data to provide insights into business performance, make recommendations, and create relevant practices and procedures to save companies time and money.