Do it Best CEO crunches record numbers
Do it Best Corp. handed out a record $170 million in member rebates in fiscal 2021. Members actually picked them up at the Indiana Convention Center, where the Shareholders' Meeting added an exclamation point to the co-op’s first live market in 18 months.
As previously reported, rebates and sales were way up for the year. And during his address, Do it Best CEO Dan Starr added some color to the numbers.
One key stat is 16 – the number of Do it Best members receiving rebates in excess of $1 million. “That’s nearly three times more of you topping this threshold than at any other time in our history,” Starr said. The biggest rebate, $3.2 million, went to Parker’s Building Supply of Texas and California.
Another colorful stat: 52% – return on invested capital. A metric that’s not often talked about, but deserves elaboration. “That’s the measure of rebate as a percentage of your stock investment,” he said. “This year, each dollar invested in Do it Best realized a 52% annual return,” up from 37% in 2019 and 41% last year.
Starr’s Wednesday evening presentation touched on a wide variety of retail and distribution issues. Here are some of the highlights from a transcript:
On responding to supply chain issues and in-stock challenges.
"We’re aggressively negotiating to get more than our share of products. We’re pursuing new vendors… and then building those relationships to source more products. We’re leveraging LBM’s Best Together initiative to consolidate purchases to lock in products. We’re also taking an aggressive position on our order projections… particularly in this long lead-time environment. That means we’ve never had more inventory in place than we do today. We’ve never had more on order. And, in many cases, we’re ordering a full year out. Simply put, we’re taking every action we can to put your product needs as a top priority of our vendors."
On succession planning as an opportunity
"We all know that the total number of independents in our industry has trended down in the last several decades, with even more poised to retire in the next. The silver lining here is the sheer number of very strong retailers and yards that are available for acquisition. Our goal is to partner with many of our members to attack this opportunity."
On a new approach to eCommerce
"With the best of intentions, when we created doitbest.com, we offered an approach that catered to the needs of each individual member, not the entire membership. Sure, we’ve had success. We learned an awful lot, but we know it’s not a sustainable direction for the future if we want to grow in that big way.
"So we’re redefining our eCommerce strategy with the goal of leveraging the power of eCommerce to drive footsteps into your store. For too long people have treated shopping online and foot traffic in the store as opposing points of view. With today's customer, and the expected demands of tomorrow’s, I’m here to tell you that we can do both. We have to do both. Because customers demand it, and they’ll keep looking until they find it."
On infrastructure spending
"We intend to invest substantially over the next couple of years in things that, while not flashy, are critical to our, and your, long-term success. I’m talking about upgrading IT infrastructure in things like our core financial package, implementing that new warehouse management system, investing in needed warehouse expansion, further expanding our small parcel capabilities, and building DOMS, our distributed order management system. When fully operational, it will bring increased, real time visibility and flexibility to your orders."