Smaller Companies: Lower Overhead, Higher Material Costs

Member companies who report net annual sales of less than $5 million spend proportionately more on materials than their counterparts but spend less on overhead.

As reported in the Dec. 11 Shortliner, this less-than-$5-million category also pays significantly more by percentage for direct labor—18 percent of net sales compared to 8.5 percent of net sales among companies who reported annual sales exceeding $25 million.

Members who responded to a survey administered by Industry Insights in 2018 saw their individual company data alongside data from the group most like theirs in terms of sales.

The survey is timed to coincide with tax season because there is useful overlap between what companies report on their taxes and the information sought by Industry Insights.

Individual company information is handled only by Industry Insights, which will distribute the 2019 survey to members this spring.