MDM-Podcasts-launch
Need Help? (888) 742-5060

In The News:

Distributor Lists Are Hard But Useful

Distributor Lists Are Hard But Useful

June 27, 2018

The question I ask myself each year as we research the 15 sectors of wholesale distribution to build our Top 40 Distributors List, with rankings by revenue size, is this: How relevant is it to compare companies that in some cases only sell products with a very small competitive overlap? I actually ask several additional questions. Here are my thoughts around a few of them and why benchmarking is important.

It’s getting harder to compare distribution company revenues. If you review the 14 product sector lists, a few story lines emerge. In spite of increasing mergers and acquisitions activity among the companies on the lists, this remains a highly fragmented industry. There are many niches – big and little. The broadest of the broadline distributors still tops the Top 40 list. W.W. Grainger has been the competitive common denominator that operates across all the sectors represented in our lists.

What’s changed in 2017 is Amazon Business arriving on our lists in the number 6 spot, based on MDM’s estimates of the company’s revenues across the spectrum of industrial, construction and commercial products represented in our lists. Digital platforms are fundamentally altering the traditional channels, and will continue to impact all distribution sectors. While Amazon is the most visible example, there are emerging competitors across all the sectors that have gone virtual. We’re in another cycle of re-fragmentation, this time driven by digital channels. There are more stories of online sellers without a physical presence building scale.

Meaningful comparisons of distributors simply by annual revenues can be very superficial, but they continue to serve a useful function. The annual list benchmarks the evolution of these channels. I expect our annual rankings to change over the next few years more dramatically. Where it used be an easier comparison of competitors largely operating within discreet product sectors, those walls will keep getting disrupted.

As we’ve already seen by example of Grainger’s change in pricing strategy, traditional models will continue to shift to stay competitive and viable. We’ll continue to benchmark those shifts as they shape the new competitive landscape emerging. And throughout the year, we'll profile the examples of companies building competitive advantage as they transform their current models into more adaptive and digitally-integrated businesses to continue staying close to customers.

As always, I’d love to hear your thoughts and comments on our annual rankings of the 130 largest industrial, construction and commercial products distributors in North America. Please comment here or email me at tom@mdm.com.

© 2019 Gale Media, Inc.

Please do not reprint MDM's content on your website without MDM's express permission as it is copyrighted material. To gain permission, email us, or call 1-888-742-5060. For information on PDF or print reprints, visit www.mdm.com/reprints. MDM welcomes inbound links from your site. Please cite Modern Distribution Management.

2018-top-distributors-listThe 2018 Top Distributors List

This free PDF includes lists of top distribution companies across 14 sectors.

You will also receive MDM Update, our daily distribution e-newsletter & other distribution-focused content.

Download the Free PDF now >>


MDM-UpdateMDM Update: Daily Newsletter 

Sign up to read the best source for news & trends in wholesale distribution, MDM Update. Delivered daily to your inbox. 

Sign-up for MDM Update >>

Post a comment to this article

Partner Center