Why Menards no longer has contractor program
I was an emloyee of Menards CC sales team for 10 years and I left a year before they got rid of the department. And I could tell for a few years that it was coming thats why i got out. i knew it was coming to an end because the owner of Menards John Menard is an egotistical penny pincher and will do anythin to make a dollar. money wise this is why it makes sense for him.
Your average Contractor department does roughly $4,000,000 in sales at an average of 21% gross margin. Which leaves you with $840,000 before overhead at a minimum 50%of the business will stay shopping at menards for conveniences so we will get back to that later. you have 5 employees in that department that make 40-60k per year so we will call it 50k each. Thats $250,000 in salaries. were left with $590,000. Another 10k per person for health insurance leaves with $540,000. Menards has employee profit sharing so for an employee at full profit sharing on 50k is $7,500 is $37,500 your now at $502,500By the time you pay for free local $60 deliveries about 4 per day thats $75,000, Now at $427,500. Minus $80,000 from the contractors 2% rebates were at $347,500 left. Now With cost of cell phones, fuel in the trucks, order mistakes, theft, Corporate office employees which there was about 30 of them, insurances, maintanance on vehicles, uniforms, office supplies, lunch ins, Etc. Etc. we will take an easy fair number and call that $100,000 you are left with $247,500 in profit.
No lets go back to the $4,000,000 and lets say they lose 50% of there business of contractors, cause any one that has worked in that department knows that at a bare minumum half of their contractors werent actually contractors and will still shop there. now that you dont have contractors asking for discounts gross margin will be up to roughly 25% of 2,000,000. Which amounts to $500,000 with no overhead from a contractor sales department. So you double your profit by eliminating the department and its 5 employees and the Corparate office staff.
Now you multiply that extra $252,500 each store is making the 350 stores there are, John Menard just made an extra $88,375,000 this year.
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