Issue link: https://www.e-digitaleditions.com/i/540646
16 FEDA News & Views pared to the expense of processing an order. Since most wholesale distributors require at least $50 to process an order all the way through to payment, this helps us make sure that we are staying ahead of costs. Gross Margin Percentage I am always very conscious of gross margin percentages. This is where dis- tributors can move the needle if they understand how to use strategic pric- ing models. There are many competitive influences that diminish margins. The profitable distributor must continually fight to stay ahead. Line Items per Order With this measurement, we are trying to drive complementary product sales. I always tell my clients and audience, "If we let an order get out the door with just one line item, we have failed to provide superior customer service." We must teach our salespeople that asking customers about complimentary items is a service. There is a good chance that the ancillary item you suggest will allow them to complete their task without further interruption. Number of Customers Exceeding $500 in Gross Margin Dollars per Month A s the old saying goes, "You can't manage what you can't measure." I have seen several branch man- agers thrust into a title with very little instruction on how they are to perform the job. This is one of those sink or swim moments that we are very fond of implementing in the distribution world. It doesn't have to be this way. A great deal of fear can be alleviated by simply giving the new manager a set of measure- ments to watch over. This simple set of measurements, or scorecard, will help the new manager recognize, diagnose and correct problems before they get too far off course. In this article, I will list a few of the common measurements to help you get started. Gross Margin Dollars per Day This is the most obvious sales perfor- mance measurement, but with a twist. I am not a fan of top-line, ego-driven sales measurement. If we are going to get our team to focus on what is impor- tant, gross margin dollars, we must base our measurement on the right criteria. I like to break the goal down to a daily number so that it is easier to digest and correct if necessary. Gross Margin Dollars per Order I like to use this measurement to help the team drive larger orders when com- Building a Branch Scorecard This one was suggested by one of my private clients. He likes to review this to make sure that a location is continually working with a wide variety of custom- ers. Without watching this, a location can begin to put too many eggs in one basket. Monthly Gross Margin Dollars per Employee This measurement was given to me by a regional manager I worked with several years ago. He had pegged a goal of $10,500 per head. As the number increased, he knew that it was time to add staff. As the number began to fall below the goal, he knew that it was time to reduce staff. Customer Service Percentage This is measured by comparing the number of line items shipped complete versus the number of line items ordered. In other words, how many times could I fill the order complete from stock? The higher the percentage, the more satisfied your customers are. Number of Backorders in the Top 200 Items This is another customer service mea- surement that keys in on the most popu- lar items. A couple of years ago, a client and I came up with this one to help By Jason Bader Jason@Distributionteam.com