So you think you know the wholesale distribution industry? Test your skills below on questions excerpted from a new training program.

from a new training program, called "The Essentials of Profitable PHCP Distribution," produced by the American Supply Association's Education Foundation.

"The Essentials of Profitable PHCP Distribution" is available from the ASA foundation for \$69.50 for members and \$99.50 for non-members. For more information, call (312) 464-0090.

1. Wholesale distribution in America has annual sales of:

A. \$3 million

B. \$300 million

C. \$3 billion

D. \$3 trillion

2. How many people work for wholesalers in the U.S.?

A. 65,000

B. 650,000

C. 6.5 million

D. 6.5 billion

3. If a company has \$1 million in annual sales, a gross margin of 25% and a net profit of 2%, how much money can it save by reducing expenses 1%?

A. \$2,300

B. \$230

C. \$230,000

D. \$23,000

4. Total sales for the PHCP industry amounts to:

A. \$100 million

B. \$40 billion

C. \$75 billion

D. \$1 trillion

5. How is gross margin calculated?

A. Subtract the gross profit from the cost of goods

B. Divide the gross profit by the gross sales

C. Add the cost of goods to the selling price

D. Multiply the cost of goods times the number of items sold

6. What is another name for "the bottom line"?

A. Gross margin

B. Mark-up

C. Net profit

D. Gross profit

7. "Co-op" dollars are paid by:

A. Customers to distributors

B. Distributors to customers

C. Manufacturers to distributors

D. Distributors to vendors

8. If a distributor has an acquisition cost of \$200 per new customer, and a 2% net profit, how much does it need to sell to a new customer before paying for that cost of acquisition?

A. \$10,000

B. \$5,000

C. \$1,000

D. Can't tell

9. About how much does a wholesaler keep as a profit out of every dollar of sales?

A. 50 cents

B. 25 cents

C. 10 cents

D. A few pennies

10. List three basic approaches to increasing profits.

Answers: 1. D; 2. C; 3. A; 4. C; 5. B; 6. C; 7. C; 8.A; 9. D; 10. Increase sales, control expenses, increase productivity.