Benchmarking Survey Reveals How All Dealers Can Achieve High-Performer Results

Results from last year’s FEDA Financial Benchmarking Survey show that the difference between typical and high-profit distributors often comes down to how they manage the little details of their business.

By Tim O’Connor
Editor and Communications Manager

High-performing FEDA dealers generated more than double the profit margin of a typical foodservice equipment and supplies dealer and nearly $140,000 more sales per employee, according to the 2024 FEDA Financial Benchmarking Survey. The “typical dealer” in the report is a company that is most representative of the entire industry, with a financial performance exactly in the middle of all participating FEDA dealers.

While it might be easy to attribute that gap to having a better-trained sales team or brilliant marketing plan, results from the 2024 FEDA Financial Benchmarking Survey, which uses 2023 data, shows high-performing dealers aren’t excelling in just one area. Rather, they are narrowly edging out the typical dealer in multiple key performance indicators (KPIs).

The annual FEDA Financial Benchmarking Survey collects data from FEDA dealer members to provide insights into how participants compare to other companies in the industry across several metrics, including net sales, profit margin, sales change, payroll expenses, and inventory turnover.

Exhibit 1. The Key Performance Indicators

Performance Results     Typical     High-Profit
Net Sales $29,500,000 $26,300,000
Profit Margin (pre-tax) 3.9% 8.2%
Return on Assets 11.3% 26.2%
The Key Performance Indicators
Sales Change 9.2% 12/5%
Gross Margin 23.1% 23.3%
Payroll Expense 11.9% 10.0%
Non-Payroll Expenses 7.4% 5.3%
Sales Per Employee $658,882 $798,089
Inventory Turnover     4.3 4.9
Average Collection Period     36.3 Days 28.1 Days

In 2023, the typical dealer generated sales of $29.2 million and had a profit margin of 3.9 percent, meaning they earned about 4 cents in profit for every dollar of sales. The high-profit dealer, by comparison, generated a profit margin of 8.2 percent — meaning they earned more than twice as much in profit for every dollar of sales. Looking at the comparison in Exhibit 1, it might not seem that the high-profit dealer outperformed the typical company by much, as the difference between the categories was only a few percentage points for most key indicators. High-profit dealers appear to simply be doing a little better across the board, but that difference is compounding into a much higher profit margin and return on assets.

Although the difference between typical and high-profit 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-profit 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 firm that conducts the survey, believes there are opportunities for typical dealers to close that gap on their high-profit competitors. Dealers wanting to identify areas for improvement don’t necessarily need to be “good at everything,” he says. Instead, he emphasizes that the most important KPIs for enhancing profit are sales growth, gross margin, operating expenses (both payroll and non-payroll), and inventory turnover.

“The key to improved performance is to develop a specific 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 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 financial benchmarking survey, to establish realistic, attainable profitability goals and determine the critical benchmarks for achieving them.”


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 confidential 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. 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.