Blog · Board and management reporting · Distributors
The ten sales KPIs a wholesale distributor should run on, each with its formula, the export it comes from and what it tells you: account coverage at cadence, dormant accounts by prior value, category share against similar customers, contribution after cost to serve, price realisation, average drop value, order channel mix, fill rate and lost lines, customer concentration, and new account activation. Also the three measures most distributors miss, the vanity figures to drop, the identity behind each table, and who should own what.
A distributor has thousands of accounts, tens of thousands of lines and margins measured in a few points. The measures that matter are the ones that say which accounts to call, which to grow, and which cost more than they earn.
| # | Measure | Formula | Export | What it tells you |
|---|---|---|---|---|
| 1 | Value coverage at cadence | Revenue of accounts touched within their tier cadence ÷ revenue of assigned accounts | CRM activity; assignment file; ledger | Whether the accounts that matter are being spoken to |
| 2 | Dormant accounts, by prior value | Prior-year revenue of accounts past k × their own typical order gap ÷ prior-year revenue | Invoice ledger | Revenue that has stopped without anyone deciding it |
| 3 | Category share against similar customers | Account spend in category ÷ account total, against the median for its segment | Ledger with category; account master with segment | Where a customer buys elsewhere what it could buy from you |
| 4 | Contribution per customer | Gross margin − rebates − cost to serve | Ledger; delivery, order, visit and returns files | Which accounts earn money after what they cost |
| 5 | Price realisation | Invoiced price ÷ list or agreed price, by customer and line | Ledger; price file | Discounts given without approval; agreed prices not applied |
| 6 | Average drop value | Revenue ÷ delivery drops, per customer | Ledger; delivery file | Accounts that could take half the deliveries |
| 7 | Order channel mix | Order lines by portal, EDI, phone, rep ÷ all lines | Order file | Cost of order handling; accounts to move to the portal |
| 8 | Fill rate and lost lines | Lines shipped complete ÷ lines ordered; value of lines cancelled for no stock | Order and shipment files | Sales turned away by stock-outs, by branch and account |
| 9 | Customer concentration | Top ten share; largest customer share; effective number of customers | Ledger, rolled up to parent | Dependence, and whether it is rising |
| 10 | New account activation | Accounts opened in period with a second order within 90 days ÷ accounts opened | Account master; ledger | Whether opening accounts produces customers |
Every one of these is computed per account, per rep and branch, and in total, and every one carries an identity that must hold before the table is shown.
Contribution after cost to serve. The ledger shows gross margin, and the costs of delivering, keying and visiting sit in other systems, so the two are never joined. When they are, a tenth to a fifth of accounts usually turn out to cost more than they earn, and most of those are one minimum order value away from profit.
Category share against similar customers. Revenue per account says how big a customer is, not how much of its spend you have. A contractor buying pipe and no fittings is visible only when compared with what similar contractors buy.
Dormancy against the customer's own pattern. A fixed ninety-day rule lists annual buyers who are fine and misses weekly buyers who have been gone for five weeks.
An account with $90,000 of revenue at 25 percent gross margin looks better than one with $400,000 at 18 percent. Add cost to serve: the first takes 250 drops and 2,400 keyed order lines a year and costs $15,080 to serve, leaving a contribution of $7,420, or 8 percent. The second takes 52 drops and costs $3,626, leaving $68,374, or 17 percent. The ranking by gross margin percent was the wrong way round.
Calls per day. Effort without direction. Replace with coverage at cadence, by value.
Gross margin percent as a customer ranking. It rewards the accounts that cost most to serve.
Number of active accounts. A count that treats a $500 account and a $500,000 account alike. Use value-weighted measures.
| Table | Must hold |
|---|---|
| Coverage | Assigned accounts = covered + uncovered; no account in two books |
| Dormancy | Customers = dormant + active + too few orders to judge |
| Contribution | Allocated cost to serve = sum of the cost pools |
| Lost lines | Lines ordered = shipped complete + shipped short + cancelled + open |
| Concentration | Sum of customer revenue = ledger total for the period |
A table whose identity fails is a table with a row missing or counted twice. It is not shown until it is fixed.
| Measure | Owner | Reviewed |
|---|---|---|
| Coverage; dormancy | Sales director; branch and sales managers | Weekly |
| Lost lines; fill rate | Operations and purchasing, with sales | Weekly |
| Price realisation; drop value; channel mix | Commercial director | Monthly |
| Contribution; category share; concentration | Commercial director; finance | Quarterly |
A measure with no owner is a metric, not a KPI; see KPI versus metric versus measure.
Ten measures, five exports. Start with dormancy and coverage because they produce a call list this week; add contribution and category share because they change which accounts get the attention. Covirage computes all of them from the exports distributors already produce, files only, with the definitions stated and the identities checked. See Covirage for distributors.
Dormant accounts by prior-year value, measured against each customer's own order cadence. It needs only the invoice ledger, it produces a call list the same day, and it usually finds six figures of revenue that stopped quietly. Coverage at cadence comes second, because it explains why the dormancy happened.
Because gross margin percent is highest on small accounts that buy at list and take small, frequent deliveries, and those are often the accounts that lose money. Contribution subtracts what the customer's own behaviour costs: drops, keyed order lines, visits, returns and late payment. The ranking of customers usually reverses.
Coverage, dormancy and lost lines weekly, as lists with owners. Price realisation, drop value and channel mix monthly. Contribution, category share and concentration quarterly. Reviewing a quarterly measure weekly produces noise, and reviewing a weekly one quarterly produces lost customers.