 |
|
Industrial Supply Wholesalers Industry Profile Excerpt
| SIC Codes: 5085 NAICS Codes: 423840 Page Length: 10-12 Last Quarterly Update: 11/10/2008 View Sample Industry Profile |
 |
The US market for distributing industrial supplies includes about 10,000 companies with combined annual revenue of $70 billion. Large companies include WW Grainger, Applied Industrial Technologies, MSC Industrial Supply, and Industrial Distribution Group. The industry is both fragmented and concentrated at the top: the 50 largest companies hold about 50 percent of the total market, but 80 percent of companies have less than $5 million in annual sales.
COMPETITIVE LANDSCAPE
Demand is closely tied to the level of US manufacturing production. Because many operating costs are fixed, profitability depends on operational efficiency, particularly inventory management. Smaller companies can compete effectively by providing specialized supplies or superior service (delivery service and product expertise). Large distributors with a network of warehouses and outlets can maintain a lower inventory/sales ratio. The industry is highly automated: average annual revenue per worker is close to $500,000.
PRODUCTS, OPERATIONS & TECHNOLOGY
Industrial supply companies sell a large number of products that industrial customers use for maintenance, repair, operations, and production (the industry refers to itself as the MRO supply or MROP supply industry). Examples include tools, pipe, and valve fittings; electrical products; fluid handling equipment; pumps, motors, fasteners, instruments; and safety and cleaning equipment and supplies. Large distributors may carry 500,000 different items (stock keeping units - SKUs). Products are grouped into product lines. Wholesalers are often referred to as either "general line," meaning they carry six or more different product lines, or as ...
Would you or your company benefit from having unlimited access to First Research’s industry intelligence tools? Click Here to find out more about Subscription options.