Companies in this sector distribute nondurable or durable goods, typically specializing by product category. Major US distributors include Avnet (electronics), McKesson (drugs and medical supplies), and Sysco (foods); top companies based outside the US include Brenntag (Germany, chemicals), Medipal (Japan, drug and household products), and WPG (Taiwan, electronic components).
The wholesale distribution industry in the US includes around 410,000 establishments (single-location companies and units of multi-location companies) with combined annual sales of about $9 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 fragmented: the 50 largest firms generate about 30% of industry revenue.
Computer and communications technology have had a major effect on the industry by improving the efficiency of warehouse and distribution operations. Automation may significantly improve industry labor productivity.
Supply chain efficiencies allow some manufacturers and retailers to bypass independent distributors. Large retailers like Walmart operate their own distribution systems, often taking delivery of products directly from producers.
Imports have become a more important source of supply for distributors, as more US manufacturers have foreign factories, and as more foreign-produced goods have cost advantages over US-made products. Foreign sources of supply have become especially important for distributors of electronics, steel, car parts, textiles, electrical and plumbing products, and furniture.
Products, Operations & Technology
The US wholesale sector's major segments are nondurable goods (about 60% of industry revenue) and durable goods (about 45%). Leading categories of nondurable
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms