Understanding AED's Cost of Doing Business Report-Understanding AED's Cost of Doing Business

Video Transcription

Video Summary

In this webinar, Al Bates discusses the key drivers of profitability in the distribution industry. He emphasizes the importance of gross margin and expenses in determining profitability. Companies that are able to simultaneously control gross margin and expenses are more likely to be successful. Bates also highlights the importance of sales growth and recommends aiming for at least a 5% increase each year. He suggests implementing a 2% wedge, where payroll grows slower than sales, to improve profitability. Increasing gross margin by 0.5% and decreasing other expenses by 0.1% can also contribute to improved profitability. Bates provides a generic plan for AED distributors, including increasing sales growth, controlling payroll, improving gross margin, and reducing other expenses. He concludes by encouraging companies to develop a tailored plan that incorporates these key factors.

Keywords

webinar

Al Bates

profitability

distribution industry

gross margin

expenses

sales growth

2% wedge

payroll

tailored plan