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    Wholesale Sector Industry Profile

    Report Page Length: 10-12
    Last Quarterly Update: 5/3/2021
    SIC Codes: 50 , 51
    NAICS Codes: 42
    Chapters Include:
    Industry Overview Trends & Challenges Industry Forecast
    Quarterly Industry Update Call Prep Questions Website & Media Links
    Business Challenges Financial Information Glossary & Acronyms
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    Excerpt from Wholesale Sector Industry Profile

    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 408,000 establishments (single-location companies and units of multi-location companies) with combined annual sales of about $8.7 trillion.

    COMPETITIVE LANDSCAPE

    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 a quarter 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 by about 12% between 2007 and 2017.

    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 ...

     
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