This is a part of the 2014 Distribution Trends Report. The annual report was researched and written by MDM editors based on interviews with dozens of wholesaler-distributors, as well as industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this report.
2014 Distribution Trends Report
Online-only competition seems to have heated up in the past year, with concerns over Amazon’s place in the B-to-B market and the largest distributors’ growing investments in their e-commerce and mobile platforms. As a result, many distributors are taking the plunge and upgrading their websites to move toward a full e-business experience with suppliers and customers.
Challenges with vending profitability continue, after a burst of activity over the past few years. Some industry-watchers say that distributors, including some of the largest, are pulling back from the aggressive sales approach they had been pursuing. But customers continue to ask for the services, and despite these challenges, vending and other inventory management services continue to be key growth drivers in the industrial distribution sector.
In the years immediately following the recession, we saw an increasing number of distributors diversifying their product mixes as part of a strategy to insulate themselves against future downturns. Now, we’re seeing some distributors pull back or at least take a more conservative approach to product mix expansion, with a harder look at the potential payback they may get from the investment. The challenges include profitability of new lines and the ability to dedicate resources to grow those product categories.
The distribution mergers & acquisitions market is expected to be stronger in the second half of 2014, with large and regional industrial distributors pursuing strategic acquisitions for product, service and geographic expansion.