Industrial Distribution is pleased topresent its annual special report on small distributors. In April, ID conducted its 2002 Small Distributor Survey. The results represent the responses of 283 distributors with sales under $20 million.

Last year, businesses in the manufacturing sector felt the effects of the economic recession. Depending upon their individual situation, some distributors were hit hard by the slow economy while others have grown their business.

It is no surprise that 37 percent of small distributors had to reduce their staff in response to the economy while nearly half had to make other cost containment efforts. These cuts primarily took the form of reduced hours, benefit reductions or pay cuts, and reduced inventory. Respondents also named a variety of cost-cutting measures.

Small distributors are increasing their adoption of the Internet. Over 23 percent of the respondents sell products online and another 43 percent use their Web site to provide product information.

In addition, small distributors overwhelmingly see flexibility and expert personal service in relationships as their greatest advantage.

What is most surprising is that nearly 90 percent of respondents characterized their manufacturer relationships as good or excellent at a time when several recent studies have shown a deterioration in those relationships. Over half of distributors have taken the initiative to better these relationships, with efforts to enhance communication being the primary endeavor.

In the article Meeting on Middle Ground , we explore this relationship with Ron King of King Tool & Supply in Erie, Pa., Jim Eastwood of Bellingham Wash.-based Puget Safety Equipment Co., and Michael Brown of Brown Aviation Tool Supply Co., in Oklahoma City, Okla.

We have the pleasure of hearing from Mark Magstadt in a contributed article. He is president of Lake City, Fla.-based Hub City Industrial Supply, Inc. Magstadt shares his wisdom in utilizing the many sources of support available to small distributors.

Finally, this month's cover story on Lancaster, Pa.-based Brown Transmission and Bearing Co. is a key part of this report. This small distributor has adopted some of the best aspects of its larger competitors while remaining small enough to deliver personal service.