categories was only a few percentage points for most key indicators. High- profi t dealers appear to simply be doing a little better across the board, but that difference is compounding into a much higher profi t margin and return on assets.
Although the difference between typical and high-profi t dealers has stayed steady for the past decade, dealers overall had a successful 2023. Sales were up 9.2 percent for the typical dealer and 12.7 percent for high-profi t dealers. Those results were a decrease from 23.1 percent and 26.2 percent in 2022, when the industry was experiencing pent-up operator demand coming out of the COVID-19 downturn, but they marked an improvement over pre-COVID growth in 2019. John Mackay, managing partner for Benchmarking Analytics, the fi rm that conducts the survey, believes there are opportunities for typical dealers to close that gap on their high-profi t competitors. Dealers wanting to identify areas for improvement don’t necessarily need to be “good at everything,” he
EXHIBIT 1. THE KEY PERFORMANCE INDICATORS Performance Results Net Sales
Typical $29,500,000
Profi t Margin (pre-tax) Return on Assets
The Key Performance Indicators Sales Change Gross Margin
Payroll Expense
Non-Payroll Expenses Sales Per Employee Inventory Turnover
Average Collection Period
says. Instead, he emphasizes that the most important KPIs for enhancing profi t are sales growth, gross margin, operating expenses (both payroll and non-payroll), and inventory turnover. “The key to improved performance is to develop a specifi c plan for each of the KPIs and combine them in a positive way,” he says. “If one out of four distributors in the industry can
Participate in the 2025 FEDA Benchmarking Survey for Dealers
FEDA is once again working with Benchmarking Analytics to collect and provide industry benchmarking information at no cost to dealer members. The data provided by members is completely confi dential and will be viewed only by Benchmarking Analytics.
Participants will be given access to an individual dashboard, allowing them to dynamically compare their company’s performance against others in the same region or sales volume group. The information generated from the report will provide operating insights and serve as a resource for management meetings, incentive compensation plans, budgeting, and other uses.
3.9% 11.3% 9.2%
23.1% 11.9% 7.4%
$658,882 4.3
36.3 Days
High-Profi t $26,300,000 8.2%
26.2%
12.5% 23.3% 10.0% 5.3%
$798,089 4.9
28.1 Days
earn over 25 percent return on assets, it should be a reasonable goal for the other three-fourths of distributors in the same industry. Ultimately that is why FEDA conducts the fi nancial benchmarking survey, to establish realistic, attainable profi tability goals and determine the critical benchmarks for achieving them.”
Additionally, many FEDA members share the benchmarking results with their boards and business partners during year-end planning.
Data collection for the 2025 FEDA Financial Benchmarking Survey is
already underway. Dealers interested in participating are encouraged to reach out to FEDA Membership and Business Development Manager Isabelle Piotrowski at
isabelle@feda.com.
Spring 2025Spring 2025 39
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