Electrical, Plumbing, and Hardware Distributors

The US electrical, plumbing, and hardware distributors industry includes about 30,000 establishments (single-unit companies and locations of multi-unit companies) with combined annual revenue of about $200 billion. Major companies include Anixter, Graybar Electric, True Value, and WESCO International. The hardware, plumbing, and heating equipment and supplies segment of the industry is fragmented: the 50 largest companies generate about 40 percent of revenue. The electrical apparatus and equipment, wiring supplies, and related equipment segment is concentrated: the 50 largest companies generate about 55 percent of revenue.

COMPETITIVE LANDSCAPE

Sales are driven by demand from the construction, telecommunications, and hardware retailing industries. Profitability depends largely on merchandising and efficient inventory management. Large companies have wide distribution networks and may offer customers a broad selection of products and services. Small operators can compete successfully by stocking specialty products, stocking all of the parts their particular customers need, or delivering superior service. The industry is capital-intensive: average annual revenue per employee is about $450,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Distributors are middlemen between manufacturers and end-users. The companies in this industry buy large quantities of products from hundreds of manufacturers, then "break bulk" and resell them to thousands of customers. This practice allows customers to buy small quantities of products from many different manufacturers. Products may include wire, cable, wiring devices, fiber optic products, electrical connectors, bolts, fittings, screws, and data products for local or wide area networks. In addition to selling ...