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As recently noted on this blog, Chicago-based Grainger, No. 3 on MDM's list of the top 40 industrial distributors, is planning to continue growing its private label offering, which accounts for about 23 percent of the distributor's overall revenue. That's about $1.4 billion in 2009 (based on $6.2 billion in overall 2009 sales).

Grainger sources less than half its private label product from overseas. Product that is sourced from outside of the U.S. accounts for more than 50,000 SKUs, or close to 9 percent of overall sales, according to a recent presentation posted at Per the 2010 Grainger Factbook, that's up from 8.3 percent of sales in 2008, 7.3 percent in 2007, and 6.7 percent in 2006. The distributor sources from 340 suppliers in 29 countries.

The plan is to continue expanding the percentage of its product sourced from overseas. Why? Well, for one, that product carries gross profit margins of around 60 percent, according to Grainger.

Grainger posted this graph, showing its gross margin growth over the past 10 years:

Grainger Gross Margins

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