August 25, 2007

Private Label: A Balancing Act

Management, Research & Analytics, Strategy, Subscriber Only / MDM Staff

The co-author of a new book on private label spoke with MDM recently about how wholesaler-distributors and manufacturers can learn from trends in consumer packaged goods markets.
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On either the distributor or the manufacturer side, there is no magic bullet” for dealing with the emergence of private-label products, says Nirmalya Kumar, co-author of a new book on the subject, Private Label Strategy: How to Meet the Store Brand Challenge (Harvard Business School Press).

For a distributor, private label requires a difficult balancing act between the needs of customers and those of branded suppliers. For the manufacturer, the emergence of private label in a category requires a strong brand strategy at the end-user without alienating the distributors it …

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Private Label Carries Legal Risks

Legal Issues in Wholesale Distribution, Management, Operations, Research & Analytics, Strategy, Subscriber Only / MDM Staff

As the trend of private label among distributors grows, it's important to recognize the legal risks associated with this strategy. If products are sourced from overseas, as many are, wholesalers may end up carrying the ultimate blame or responsibility in a number of situations.

The information provided here is from a National Association of Wholesaler-Distributors legal brief. The brief can be found at NAW's Web site, www.naw.org.

Product Liability
In the U.S., any seller of a private-label or manufacturer-branded product is liable for losses, injury or damage caused by the defective product under strict tort liability.

Normally, a wholesaler-distributor in a U.S. suit will bring the manufacturer of a defective product into the case …

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Precision President on the Decision to Sell

Companies, Finance, Mergers & Acquisitions, Power Transmission/Motion Control/Fluid Power, Subscriber Only, Top Distributor Sectors / MDM Staff

Precision Industries President and COO Chris Circo says the agreed-upon acquisition by DXP Enterprises, Inc., Houston, TX,&nbsp ; was for strategic reasons, and that Precision and its management would continue as usual for the foreseeable future. The deal was not made as an exit strategy for the family.
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We’re still young and we want to keep working as long as we are having fun,” Circo says. “This is the business that we want to be in and the business that we grew up in. We think we can continue to do a lot of good for the combined organizations.
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DXP Enterprises will acquire Precision Industries, Inc., Omaha, NE, for approximately $106 million. The deal nearly doubles the size of DXP.
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Precision has annualized 2007 sales of approximately $250 …

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MDM Technology Case Study: Weighing the Cost of a WMS

Strategy, Subscriber Only, Technology / Lindsay Young

This marine supplies distributor implemented a Warehouse Management System at its single warehouse, significantly cutting shipping errors and improving data collection and sales trend analysis.
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Lorenz & Jones Marine Distributors Inc., Ankeny, IA, believes in its Warehouse Management System so much that it uses it as a tool to bring in new customers.
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The distributor invites prospective customers to the 50,000-square-foot warehouse, places a Radio Frequency terminal in their hands, and lets them pick orders. The demonstration illustrates how easy it is to be directed to the right products.
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Potential customers are sometimes wary because they have had problems with suppliers that regularly shipped the wrong products or the wrong …

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MAPI: Export Growth Should Balance Out Weaknesses in U.S. Economy

Economic Trends, Free, Research & Analytics, Subscriber Only / MDM Staff

In the face of continuing weakness in the housing sector, growth in the U.S. economy is expected to be slower than previously anticipated, according to a new Manufacturers Alliance/MAPI quarterly report.

The Manufacturers Alliance/MAPI Quarterly Economic Forecast forecasts that inflation-adjusted GDP growth, 3.3 percent in 2006, will slow to 1.9 percent in 2007 before regaining some strength, rising to 2.5 percent in 2008.

The housing downturn will likely be more severe, more widespread, and last longer than most analysts expected,” said Daniel J. Meckstroth, Manufacturers Alliance/MAPI Chief Economist. “… Manufacturing is buttressed, however, by somewhat better prospects in the trade sector. Exports are expected to perform well in relation to imports and …

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Commentary: In Private Label, Look for the Sweet Spots

Free, Management, Perspective, Strategy, Subscriber Only / Tom Gale

Even if you don’t intend to add private label products to your product mix today, pay attention to what competitors are doing and how they position private label against your manufacturer brands.

As our lead article in this issue points out, private label really took off in consumer packaged goods when the industry consolidated. As retailers created national footprints, they gained the scale to effectively build out private label programs.
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And it certainly requires a certain amount of scale to support the investment into private label – to source, develop and market effectively while not damaging your current lines.
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In distribution channels, it’s important to note that it’s not just the national chains that are building private label brands. …

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MDM News Digest 3716

Free, Subscriber Only / MDM Staff

DXP Enterprises, Inc., Houston, TX, will acquire Precision Industries, Inc., Omaha, NE, for approximately $106 million. The deal nearly doubles the size of DXP. Precision has annualized 2007 sales of approximately $250 million. &nbsp ; DXP’s sales in 2006 were $279.8 million. Its sales this year will approach $340 million, based on first-half results. More

LN Acquisition Corp., St. Louis, MO, a Harbour Group company, has acquired Reelcraft Industries, Inc., Columbia City, IN. Reelcraft is a manufacturer of spring-driven hose, cord, and cable reels for use in industrial, automotive, aerospace, military and specialty applications with facilities in the U.S., Canada, England and China. Reelcraft …

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U.S. Market Analysis: Power Tools

Market Analysis, Research & Analytics, Subscriber Only / MDM Staff

The industrial product group listed here – Power Tools – represented a market in 2006&nbsp ; of $1.8 billion, according to estimates by Industrial Market Information, Minneapolis, MN.&nbsp ;

These charts show the top ten industries, by SIC code, consuming these products; and the 2006 end-user consumption of these groups sorted by the nine government market …

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MDM August 25, 2007

Subscriber Only / MDM Staff

This is the pdf of this issue of Modern Distribution Management. Apply the full $24.95 pay-per-view cost toward an annual subscription (within 30 days of purchase), which includes two issues a month plus access to more than six years of online archives and market data. Call 1-888-742-5060 or email info@mdm.com to …

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MDM August 25, 2007 Read More »

August 25, 2007

Private Label: A Balancing Act

Private Label Carries Legal Risks

Precision President on the Decision to Sell

MDM Technology Case Study: Weighing the Cost of a WMS

MAPI: Export Growth Should Balance Out Weaknesses in U.S. Economy

Commentary: In Private Label, Look for the Sweet Spots

MDM News Digest 3716

U.S. Market Analysis: Power Tools

MDM August 25, 2007

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