The 2020 Mid-Year Economic Update_long

The Last Normal Year: 2020 Market Leaders Provide a Benchmark for the Future

The 2019 revenue statistics in MDM's 2020 Market Leaders top distributors lists are going to serve as an important benchmark while wholesale distribution recovers from COVID-19.
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MDM’s 2020 Market Leaders list of the top distributors in the U.S. is here. The rankings reflect 2019 revenues, whether company-reported or estimated by MDM. I know looking back at anything from before about mid-March can feel like we’re visiting a foreign world. At least, a world that no longer belongs to us. But with time yet to tell how the market’s recovery from COVID-19 will shape out in the long run, these 2019 revenue statistics are going to serve as an important benchmark while wholesale distribution strives to get back to where it once belonged.

MDM’s current market forecast for the entire U.S. wholesale distribution sector in 2020 is for a roughly 11% year-to-year decline in annual revenues. As our CEO Tom Gale puts it, we may come to view 2019 as the Last Normal Year for quite some time.

The Market Leaders rankings reflect more than 150 companies, across 16 discrete sectors. In the latest issue of Premium — out today — you’ll find the rankings for several of our key categories, including industrial, electrical, PT/bearing and fluid power. The complete lists for all sectors are available online at mdm.com/top_distributors.

Thanks to our newly remodeled website, you can now easily search for individual companies or click through the list by sector and then click on individual company names to see a landing page for each. Check it out, and let us know what you think by emailing editor@mdm.com. The rankings are not a perfect science — often we’re comparing apples to oranges — and if you see anything worthy of a second look, please let us know.

Although the world has changed since these 2019 revenues came in, the areas where many of these leading companies succeeded last year, such as in e-commerce and technological investments, serve as a harbinger for the elements of business that are helping distributors to now make it through 2020.

It’s not surprising that e-commerce as a percentage of sales in wholesale distribution has been on the rise for more than 20 years. According to the latest data from the Business Research Division at the University of Colorado Leeds School of Business, wholesale e-commerce increased at a compound annual growth rate of 11.6% between 1998 and 2018 (the most recent data), representing about 28% of total wholesale sales in 2018. Of course, that was before the pandemic. I expect it will play a monumental role in the 2021 Market Leaders ranking.

Regular followers of our annual Market Leaders issue — now in year 11 — know that we couple the quantitative top distributors listing with several qualitative features on leading companies from the rankings, known as MDM’s Market Movers. In the August 25 issue, you will find profiles of Sonepar USA, Wurth and Affiliated Distributors. All three laid groundwork in 2019 that is paying dividends throughout 2020’s disruption. (A note on AD: Although not a distributor itself, the marketing group represents a growing number of Market Leaders companies. We felt their impact on the competitive landscape merited a closer look at the organization.)

For more detail on this year’s Market Leaders ranking, listen to our recent webcast, available at reports.mdm.com/2020-market-leaders.

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