Outrageous Prediction Or Not?

By Robert N. Renkes

A portion of the most recent PEI Young Executives Conference was devoted to why it is important to predict the future. “We’ve all witnessed how success can come to those who appear to see the future more clearly than others,” our speaker suggested. I think that’s true—there is a distinct advantage to be gained if you are able to anticipate or envision the future with some degree of accuracy.

Toward the end of that part of the program, our speaker challenged the audience to come up with the most outrageous prediction that conceivably could happen in our industry somewhere down the road. This was mine: There will be 100 stocking distributors of petroleum marketing equipment in the United States by 2020.

I thought that my bold, audacious and certainly outrageous prediction would bring howls of protest from those assembled. While the prediction wasn’t enthusiastically embraced, it wasn’t utterly dismissed as being completely without merit.

Smaller distributors—those doing less than $3 million a year in gross annual sales—are disappearing, slow-ly but surely. Mid-sized distributors, with sales between $3 million and $10 million, are being absorbed by larger, regional distributors. Again, it’s not a sea change, but definitely a trend. And large distributors have been growing in size and number for most of this decade.

Sit back and think about what the industry would be like with 100 distributors. If you are a distributor, will you be one of the 100? Do you want to be one of them? Could you be in a position to be one of the 100 by 2020?

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If you are a manufacturer, how would that change how you currently market your products? Could there be 900-pound gorillas in the distributor ranks? Imagine if there were half dozen or so distributors with offices in 10 or more states, all doing $100 million or more by 2020. Would you do things differently?

If you are a service or construction firm, what would it be like if there were only two competitors in your area from which you could buy equipment? Is that any different than it is now? Would that change the way you do business?

Am I right in my prediction that there will be 100 distributors in the United States come 2020? Who knows? I am not an expert. I am certainly not out there in the marketplace every day like you are. And I am powerless to make any part of my prediction happen.

But I think it is something you should consider. If you agree, what is the most likely scenario for your company? Are there other plausible scenarios? How are they likely to occur and how will you respond?

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The PEI Journal • Second Quarter 2008 • Volume 2, No. 2 • Contents are Copyright © Data Key Communications, Inc.
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