Drouillard at STAFDA: Distributors Should Charge for Delivery

Jason Sandefur

Distributors have traditionally featured free delivery as a value-added benefit. But with traffic congestion getting worse and fuel costs continuing to rise, distributors are feeling the added costs,” outgoing president Greg Drouillard told members of the Specialty Tools and Fastener Distributors Association meeting in Nashville.
“There is no such thing as a ‘free’ delivery — it’s just a question of who pays for it,” Drouillard stated.
According to STAFDA”s 2007 Distributor Profile Report, only 27% of distributors enforce a minimum delivery charge, with the average minimum set at $25.
“So for all practical purposes, we’re nearly all continuing to offer free delivery even though it takes our vehicles longer and longer to reach the customer,” Drouillard stated.
Added to the cost is the reality that the customer or the jobsite “is farther from our company headquarters than it used to be.”
“Its no longer possible for distributors to absorb freight costs,” Drouillard emphasized. “We need to seriously consider including some or all of these costs into our pricing strategies.”
This can be accomplished by setting a “real” minimum delivery charge, adding a fuel surcharge, or offsetting savings the customer can earn by picking up his order. For those businesses that don”t want to show a separate line item for delivery, Drouillard advised building deliver costs into product prices.
Retaining skilled workers is another concern among distributors, Drouillard noted.
“The competition for workers is intense now and will become more so in future years,” Drouillard stated. “Losing employees to “better offers” will be constant problem resulting in a turnover rate of 30% or higher.”
Drouillard said baby boomers were more loyal to a company “and the notion of a career path that included ascending the corporate ladder.”
“Middle management was considered a plum assignment that also brought job security.”
But the latest wave of workers commonly called “Generation Y” place a higher value on what Drouillard called “work-life balance.”
“They are less willing to sacrifice personal and family time for the office.”
Likewise, downsizing “frenzies” have made middle management positions less attractive to them.
“Today, retaining employees means willingness to be more flexible about who does what,” Drouillard emphasized. “Giving employees more control over a significant portion of their job content can make the difference between losing or keeping them.”
In a wide-ranging speech, Drouillard also spoke about quality issues related to imports from China.
“To the average person, it might look a little like this: China”s not only eating our economic lunch but gradually supplanting us as everyone”s friendly banker. With over one trillion dollars in currency reserves, China is investing far and wide, including Africa and the Middle East.
“For years, we all thought the Chinese were quick learners and that their product quality measured up. Now we”re not so sure. China has struggled lately as the quality of products such as seafood, dog food, toys, tires, and now toothpaste is being questioned. It will be interesting to see how consumers will respond to future purchases.” \ �2007 FastenerNews.com