NHCN recasts its annual Distributors Scoreboard to show where products flow

Home Channel News, July 3, 2000

Traditional channels for the supply of hardlines and building materials are changing rapidly. Distributors across the United States are, with greater frequency than ever, stepping out of their traditional role as go-betweens for manufacturers and retailers, in favor of selling direct to professional customers and even consumers.

However, news about the death of the conventional "two-step" distributor has been greatly exaggerated. And for the first time, National Home Center News has reorganized its annual Distributors Scoreboard by ranking distributors by their two-step sales.

NHCN also has done away with the artificial lines that it has used to separate distributors by the products they handled or by their business function. Consequently, our Top 150 listing ranks the two-step wholesale sales of hardlines and building material distributors with the wholesale sales of the dealer-owned buying groups and building products co-ops.

Excluded from these figures are the direct-to-end user sales for each of the companies ranked. (On the building materials side, the direct sales have been tracked within the Top 350 ranking of Pro Dealer, which was published with NHCN's June 5 edition.)

By reorganizing our distributor ranking, NHCN is attempting to provide its readership with a more comprehensive listing of the major companies dealers are turning to for products and support. And as more dealers start selling products online, their reliance on distributors is likely to increase to ensure seamless delivery to their e-shoppers.

Methodology

For the first time, NHCN's Distributors Scoreboard is ranking distribution companies by two-step sales, and has combined into its ranking the wholesale sales generated by the leading buying groups.

To obtain data for these and subsequent charts throughout this issue, CSG Information Services -- a division of NHCN's parent company Lebhar-Friedman--polled more than 200 companies. The information provided by these distributors was then spot-checked for accuracy by NHCN's editors.

Typically, the source for these data was the president, vp-finance, controller or general manager of each company. Sales were carried out to the nearest $100,000 to ensure more precise ranking. Ties were broken by percentage sales increases, then by number of employees (the smaller the number, the higher the ranking).

For the first time, NHCN is also running a listing of the industry's leading specialty distributors, using the same data-collection methodology.

In cases where companies' sales figures show increases between years but list percentage changes as "0," the changes reported were so small that they rounded off at zero.