NTEA distributor profit survey shows 23% gross margin

The just-released 2002 NTEA Distributor Profit Survey Report reveals that for the typical truck equipment distributor in 2001, gross margin was 23.6% of sales (i.e., every dollar of sales volume generated 23.6 cents of margin to cover the expenses and generate a profit). The high-profit firm did somewhat better than the typical firm with a gross margin of 24.5%. According to Al Bates, president of Profit Planning Group (Boulder, CO), an independent research firm that compiled the survey for the NTEA, "Margin is probably the most challenging area of the business to control. Margin is impacted by relationships with suppliers, the firm's pricing structure, inventory shrinkage and a long list of other factors. Of greater consequence, gross margin has a huge impact on profitability. Getting the margin right takes the pressure off of other operating areas of the business."

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