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Medical Equipment Distributors Industry Profile Excerpt
| SIC Codes: 5047 NAICS Codes: 42345 Page Length: 10-12 Last Quarterly Update: 9/8/2008 View Sample Industry Profile |
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The medical equipment and supplies distribution industry in the US includes about 6,000 companies with combined annual revenue of about $53 billion. The largest national distributors include Owens & Minor, Henry Schein, Patterson Dental, and PSS/World Medical. The industry is highly concentrated: the top 50 companies hold almost 65 percent market share. Most companies participate at a regional or local level and have revenues of about $5 million.
COMPETITIVE LANDSCAPE
Demand depends on the number of people in the US receiving medical treatment. The profitability of individual companies depends on merchandising and efficient delivery systems. Large companies have economies of scale in purchasing, and highly developed infrastructure that allow for efficient distribution. Small companies can compete effectively by specializing in a product line or servicing a local customer base. Annual revenue per employee is about $500,000.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include medical and surgical supplies (about 45 percent of the market) and instruments and equipment (about 40 percent). Other products include orthopedic and prosthetic appliances, dental products, and veterinary supplies. Some companies carry over 100,000 items while others specialize in niche markets and may carry only a few different stock items to serve a local market’s specific needs.
Distributors buy high volumes of product from manufacturers, store these products at company-operated distribution centers, and deliver to customers as required. Products are generally delivered by company-owned or leased trucks. Common carriers are used as needed.
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