|Last Quarterly Update:||10/20/2014|
|SIC Codes:||50 , 51|
|Industry Overview||Trends & Challenges||Industry Forecast|
|Quarterly Industry Update||Call Prep Questions||Website & Media Links|
|Business Challenges||Financial Information||Glossary & Acronyms|
Companies in this sector serve as wholesale distributors of nondurable or durable goods, typically specializing by product. Major US distributors include Avnet (electronics), McKesson (drugs), and SYSCO (foods); top companies based outside the US include Alliance Boots (Switzerland, drugs), Brenntag (Germany, chemicals), Mediceo (Japan, medical products), and WPG (Taiwan, electronic components).
Many wholesalers approach new foreign markets through partnerships or acquisitions. Markets such as China, India, Brazil, and Russia are expected to grow in importance to wholesalers.
The wholesale distribution industry in the US includes about 330,000 companies with combined annual sales of about $7 trillion.
For most distributors, demand is closely linked to local economic activity. The profitability of individual companies depends on efficient inventory management and order fulfillment operations. Large companies can supply customers with a wider range of goods and in more markets, but smaller distributors can compete successfully by carrying specialty products or providing add-on services. In the US, the industry is highly fragmented: the 50 largest distributors generate about 25 percent of industry revenue.
Computer and communications technology have had a major effect on the industry by improving the efficiency of warehouse and distribution operations. Largely because of automation, industry labor productivity improved more than 20 percent between 2003 and 2013.
Supply chain efficiencies allow some manufacturers and retailers to bypass independent distributors. Manufacturers account for nearly 30 percent of wholesale trade in the US. And large ...
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