Customer Service Responsiveness

As the wholesale industry changes and becomes more competitive, it’s important to differentiate your business. One way to stand out is to provide a superior customer experience through a helpful and responsive customer service team. Set goals for your customer service response time and track against this metric to ensure you are maintaining a positive customer support experience. A quicker response time to customer questions, issues and concerns, with easy-to-access agents and clear communication channels will help to enhance your reputation with customers.

  • > 1 day
  • > 6 hours
  • < 6 hours
  • Real-Time
77% Wholesalers Think Sales Growth will be up in 2019 Learn more here. (Source: MDM)
“37% of distribution professionals named customer retention as one of their top three priorities in 2019.”

eCommerce Growth

Distributors are experiencing a major shift in the standards for B2B purchasing. More companies are purchasing goods via multiple channels rather than from a dedicated distributor. Buyers are accustomed to having detailed information on all products—availability, delivery data, etc.—at their fingertips online. To meet these expectations, distributors are expected to have top notch eCommerce sites to compete. eCommerce growth indicates how well your distribution company is adapting to the changing purchasing environment and the rate at which you are growing your online business.

  • < 15%
  • 15%
  • 19%
  • > 20%

Inventory Turnover

Inventory turnover reveals how fast products are moving out of the warehouse and creating cash flow. Inventory turnover for wholesalers is a difficult balance. On the one hand, an increase in turnover can result in a company receiving cash more often, but can result in larger carrying costs. On the other hand, just in time inventory is a strategy to reduce carrying costs, but is difficult to achieve unless demand is well defined and predictable. Identifying the optimal inventory turnover depends on the gross margin of your items, type of items sold and seasonality.

  • < 5.9 turns
  • 5.9 turns
  • 7.3 turns
  • 9 turns
Foundational
Competitive
Best in class
Transformative

eCommerce
Growth

< 15%

15%

19%

> 20%

eCommerce
Growth

This metric indicates the rate at which your company’s e-commerce revenue is growing.

Revenue Growth

< 1%

2%

4%

> 5%

Revenue Growth

This metric indicates the rate at which your company’s total revenue is growing.

Gross Margin

9.5%

17.9%

24.2%

30.4%

Gross Margin

Percentage of revenue after cost of goods sold. This metric signifies how efficiently your company uses its resources to deliver products profitably. The higher the percentage, the better.

Inventory
Turnover

< 5.9 turns

5.9 turns

7.3 turns

9 turns

Inventory
Turnover

Ratio showing how many times your company’s inventory is sold and replaced over a period of time. The days in the period can then be divided by the inventory turnover formula to calculate the days it takes to sell the inventory on hand. A low turnover ratio signifies weak sales and excess inventory. A high ratio suggests either strong sales or large discounts.

Fill Rate

< 98%

98%

98.8%

99.5%

Fill Rate

Percentage of customer or consumption orders satisfied from stock at hand. It’s a measure of an inventory’s ability to meet demand. A higher fill rate indicates a better ability to meet sales requests, influencing higher customer satisfaction.

Customer Service Responsiveness

> 1 day

> 6 hours

< 6 hours

Real-Time

Customer Service Responsiveness

This metric represents the average time it takes to respond to customer questions, issues or concerns. A lower response time drives more efficiency, freeing labor time for more valuable tasks and can reduce the need to hire additional staff.

Time to Close
the Books

> 10 days

5 days

2 days

Hours

Time to Close
the Books

How many days it takes your finance team to produce a Profit and Loss Statement, Balance Sheet and other analyses so that managers can understand how the business performed for that period (typically monthly). The fewer days, the more efficient the finance team.

IT Cost as a %
of Revenue

> 2.5%

2.5%

2%

1.5%

IT Cost as a %
of Revenue

Dollar amount spent on IT infrastructure and IT teams as compared to total revenue. The lower this percentage, the higher the IT efficiency.

Source(s): APQC, Finlistics

Parameters

Foundational

Your business may just be beginning to track this metric, perform this business function or identified this as a problem. Improved execution in this area should be a high priority.

Competitive

Your business is competitive in this area, but there’s still room for advancement. Consider investments to improve related operations to achieve better results.

Best in Class

Your performance in this area is considered best in class and is superior to the average company in your sector. You’ve laid a solid foundation in this business function, and the next step is optimization.

Transformative

You’re achieving the optimal results for this metric. Your business processes in this area are highly efficient and stand out against competitors. Keep investing in this area to maintain these results.