Expeditors 8-K Report

As usual, the folks at Expeditors (EXPD) have fun with their 8-K report. Here’s a sample:

9. Recently one of your competitors indicated they will incur incremental costs due to the successful recruitment of sales talent from other firms currently undergoing consolidation. Has Expeditors been successful in recruiting new sales members from these firms and if so what are the anticipated pre-tax recruitment costs in Expeditors’ upcoming quarter if any?
Did somebody really say this with a straight face? And perhaps more importantly, did you believe it? Pardon us if we seem a little glib at such an announcement by one of our competitors, but we have never measured sales recruitment in terms of “incremental costs.” In fact, our outlook is captured in an old advertising slogan that went something like “there is always room for Jell-o.”
Around here we assess a potential sales hire, whether from a merging company or somewhere else, in terms of profitable business that the person might add. If they can bring enough profitable new business, you are looking at the sales equivalent of a very green gelatin dessert.
We constantly attempt to attract and develop good sales people. We want sales experts, not sales specialists. The difference between the two being that the specialist conducts a lot of sales activity, perhaps with mixed results, while the sales expert actually brings in new business.
At Expeditors, the responsibility for the sales efforts does not rest solely on the head of our sales people. The U.S. Marine Corp has a maxim that goes something like “every man a rifleman”. The meaning is clear for regardless of the specialty assignment a member is given, from a cook to platoon leader, each marine is expected to be an expert with a rifle and to be ready to use it, to the exclusion of all else, if the situation calls for firepower. By that same token, at Expeditors, sales is everyone’s business. Operational personnel are expected to be heavily involved in sales and sales support and they are charged with taking the lead role in connection with customer retention.
So, you can say that at Expeditors we’re always looking for additional sales “experts”. This is true no matter what the competition is doing to each other. We have added a few lately, but we are looking for incremental profits not worrying about extra expense.
Any company that talks about “incremental costs” from hiring sales talent like these expenses were something material to a quarter, must not be very confident about the potential pay back. They may be about to eat something, but it probably isn’t going to be Jell-o.

Posted by on January 4th, 2006 at 10:31 am


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