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Tariffs

How Are Distributors Combatting Higher Costs from Tariffs? Here’s What They Told Us

We polled nearly 300 distributors and manufacturers in early April about the methods they are using in response to a higher cost of goods sold brought on by tariffs. See our detailed breakdown of the results, including by revenue size, along with plenty of respondent commentary.

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Leadership

Meet MDM’s 2025 Women in Distribution

Economic Trends

MDM Forecast: April 2025 Update

Mergers & Acquisitions

QXO Confirms Plans to Rebrand Beacon

Tariffs

A Few Words on Elasticity, the Future of Tariffs and Distributors’ Response

Safety Products

From Niche to Necessary: The Business Case for Women-Specific PPE

Mergers & Acquisitions

Prize Claimed: Here’s Why QXO Relentlessly Pursued Beacon

Human Resources in Wholesale Distribution

What Distributors Pay Their Fleet Drivers, Managers

Economic Trends

MDM Forecast: March 2025 Update

Strategy

Beyond Supply: How Distributors Can Add Value as an Information Hub Amid Tariff Turmoil

ECONOMIC OUTLOOK REPORTS

2024 Annual MDM Economic Outlook

Our 2024 EOR is a comprehensive economic reference guide to the U.S. wholesale distribution industry and its many different verticals. It is comprised of 20 different subreports.

Premium Monthly

MDM March 2025 Premium Monthly

Now live, the issue’s content spans your role as a source of tariff clarity; the business case for women-specific PPE; why QXO relentlessly pursued Beacon; what distributors pay their fleet staff; our latest MDM Forecast; a fasteners market profile; and more.

Market Insight Reports

MDM 1Q25 Forecast Report

This comprehensive MDM 1Q25 Forecast is a guide to the industrial economy for wholesale distribution executives, providing a historical, current and future snapshot of numerous key economic indicators in one convenient place.

MDM 4Q24 MarketPulse Report

Find a wealth of data and analysis extracted from the 4Q24 Baird-MDM Industrial Distribution Survey, including trending charts and figures for revenue and expectations, plus plenty of interesting commentary.

Case Studies

MDM Case Study: MSC Industrial Supply

The metalworking and MRO supplies distributor has successfully transitioned from a catalog-driven product house that relied on spot-buys to its role today as a digitally-driven, “Mission Critical” company. Here’s how.

MDM Case Study: Watsco

Watsco has achieved a marketing-leading position in HVACR distribution through a combination of deep supplier partnerships, a buy-and-build philosophy and a technology-first mindset. We examine the company’s recent evolution and where it’s going.

Research & Analytics

Distribution Financial Metrics and Trading Multiples: 2Q2012

This table highlights key financial metrics and trading multiples for 28 publicly traded distributors in the industrial and building products industries as of Aug. 20, 2012. Download this data below. Also find graphic illustrating median EBIDTA multiples for the same distribution companies.

These materials, prepared by Robert W. Baird & Co. for MDM, are for informational purposes only.

Free

RadioShack Extends Use of IBM DemandTec Software

RadioShack will look to apply shopper-focused strategies to each of its 4,700 stores.

Companies

Grainger Goes Mobile: What It Means

Grainger wasn’t the first distributor to introduce a mobile app, but the app it recently launched is arguably one of the most robust available on the market. The announcement comes as demand for mobile access to product information, availability and order capabilities continues to increase across industries. This article examines the process behind Grainger’s application development, as well as what’s driving more distributors to go mobile.

Have a question? Check your smartphone. We’re no longer required to wait until we get home or until we can connect our computers to the Internet to get the answer. While this has been a growing trend in our personal lives for years, it is now making a major mark in the B-to-B world.

A number of distributors have developed their own targeted apps.

Platt Electric Supply, for one, developed an app with a store locator and mobile access to your Platt account. HVAC distributor Johnstone Supply created a broader “toolkit,” including a duct-sizer and efficiency savings calculators.

Grainger’s new mobile app, released in August, takes the concept even further – aiming to bring the full functionality of grainger.com to the smartphone.

The Grainger Model
Over the past year, mobile traffic to Grainger’s website has increased 400 percent, …

Free

AMA to Use IBM Smarter Commerce to Target Member Needs

The software will help the American Marketing Association connect with marketers across multiple channels.

Chemicals & Plastics Distribution

VWR International Buys Mining Supply Business

The purchase of Australian KLEN International will strengthen VWRs position in mining lab supplies.

Economic Trends

Manufacturer Survey: Elections Delaying Some Companies’ Spending Plans

Latest Prime Advantage report finds manufacturers are optimistic, but elections are causing some to put off plans to invest.

Economic Trends

July Manufacturing Technology Orders Down 2.3% from June

Year to date, manufacturing technology orders are up 5.4 percent over the same period in 2011.

Companies

Making the Most of Mobile

Expert: ‘Don’t do it just because it’s cool.’

Companies

Brady Reports $18M Loss in Fiscal 2012

Organic sales for the manufacturer of identification solutions fell 0.4 percent for the fiscal year.

Finance

Singer Equities Acquires Industrial and Marine Equipment

Acquisition expands Singer Equities’ reach in Louisiana.

Subscriber Only

IBM Predicts Intelligent-Guided Future Customer Experience

To help companies realize the potential of the Smarter Commerce revolution, IBM teams with First Data to establish retail commerce best practices.

Free

Anheuser-Busch InBev Extends Global Supply Chain with IBM Software

Anheuser-Busch InBev has signed a new five-year contract to extend its use of IBM Emptoris solutions.

Finance

Triad Technologies Acquires Pennington Rubber

The acquisition will enable an expanded industrial hose product line.

Free

Descartes Sales Up 6% in 2Q

Profit fell slightly to $2.5 million.

Free

Tip: Find Creative Ways to Lower Health Care Costs

Options exist to help offset rising health insurance costs under ‘Obamacare’

Free

TECSYS Posts 28% Sales Growth in Fiscal 1Q

Profit increased six fold to C$1.1 million (US$1.1 million).

Economic Trends

MAPI Forecast: Slow Economic Growth in 2012, 2013

Pent-up demand offset by uncertainty, declining activity in Europe and concerns around China.

Companies

Arrow Electronics Acquires Global Link Technology

Global Link provides electronics asset disposition services in the Rocky Mountain region.

Economic Trends

Manufacturing Sector Contracts in August

The PMI registered 49.6 percent, indicating a third consecutive month of contraction.

Building Materials/Construction

July Construction Spending Down 0.9% from June

For the first seven months of 2012, construction spending was $464.4 billion.

Economic Trends

Commentary: Don’t Look in the Rear-View Mirror

As the lead article in this issue illustrates, the inflation threat largely driven in 2005 by energy price hikes has moderated, particularly the last few months of the year. Wholesale prices rose 1.1 percent in 2006, compared to 5.4 percent in 2005. But wholesale prices except food and energy – the core inflation rate – moved up 2 percent in 2006 following a 1.4 percent gain in 2005.

Distributors need to look more closely at the stats in their own sectors, as there are a lot of mixed signals. Materials for durable manufacturing increased 13 percent in 2006; prices for materials/components for construction increased 4.3 percent.

But as these pages pointed out (Adam Fein article in Nov. 10, 2006 MDM), distributors really need to watch steroid revenue growth produced …

Economic Trends

Inflation Softens in 2006

Click here for charts showing inflation by product group – 16 products, including tools, fasteners, machinery/equipment, fluid power, and others, are displayed in this document.

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This is an overview of wholesale price inflation trends in the past year for commodities in industrial and construction channels. Overall, core inflation rose 1.1 percent in 2006 -a significant slowdown from 2005. But the Federal Reserve still sees inflation as a potential threat in the next year, albeit at lower levels.

Thanks to a slowdown in energy price increases, wholesale prices rose 1.1 percent in 2006, in contrast to the 5.4 percent rise in 2005, the Bureau of …

Economic Trends

Distribution Financial Metrics and Trading Multiples

This table highlights key financial metrics and trading multiples for 30 publicly traded distributors in the industrial and building products industries. Download the pdf in this article to see the data. Also find graphic illustrating median EBIDTA multiples for the same distribution companies.

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These materials,&nbsp ; prepared by Robert W. Baird & Co. for MDM are for informational purposes …

Economic Trends

Industrial Production Rises 3% in 2006

Industrial production rose 0.4% in December after a decrease of 0.1% in November. Output in November was previously estimated to have advanced; weaker data for a number of industries, particularly steel, led to the downward revision.

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For the fourth quarter as a whole, industrial production decreased 0.5% (annual rate). In the manufacturing sector, output increased 0.7% in December, and most major industry groups registered gains.

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The output of utilities fell 2.6%, the result of relatively mild temperatures during the month, while the output of mines moved up 0.8%.

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Over the 12 months ending in December, total industrial production increased 3.0%, to a level that was 112.4% of its 2002 average, and total …

Building Materials/Construction

13% Fewer Housing Starts in 2006

Housing starts in December were at a seasonally adjusted annual rate of 1,642,000. This is 4.5 percent (±8.8%) …

Economic Trends

Wholesale Prices Rise 1.1% in 2006; 0.9% in December

Wholesale prices rose 1.1% in all of 2006, in contrast to the 5.4% rise in 2005, the Department of Labor reported. The government attributed the slower rate of advance to the index for finished energy goods, which fell 2% in 2006 after climbing 23.9% a year earlier. Otherwise, wholesale prices except foods and energy moved up 2% in 2006 following a 1.4% gain in 2005.

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At the earlier stages of processing, prices received by intermediate goods producers increased 2.8% in 2006 compared with an 8.6% advance in the preceding year, while the crude goods index declined 2.4% after moving up 21.1% in 2005.

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Wholesale prices rose 0.9% in December, seasonally adjusted. The rise follows a 2% advance in November and a 1.6% decline in October. At the …

Economic Trends

Nov. Power Transmission/Motion Control Sales Up 10.7% YTD

In November, U.S. distributors’ year-to-date sales of power transmission/motion control products climbed 10.7% as compared to sales for January through November 2005, according to the latest November trend data released by the Power Transmission Distributors Association. Sales fell 3.6% over the previous month and were up 7.8% as compared to November 2005.

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Days sales in accounts receivables rose 1.3% as compared to October 2006 and increased 2.9% as compared to the same month last year.&nbsp ; Annualized sales to inventory ratio in November was 8.3, compared to 7.9 in 2005.

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For November, the confidence level of U.S. distributors decreased to 6.2 from 6.3 in October on a 10-point scale.

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Canadian distributors’ …

Economic Trends

MDM Inflation Index: November 2006

Modern Distribution Management’s November Inflation Index, which measures a cross-section of industrial supplies, was up 0.20% from the previous month, and up 4.04% from November 2005.

Summary of&nbsp ; MDM Inflation Index for the past 12 months:

November 2006 Index 266.5
October 2006 Index 265.9
September 2006 Index 265.6
August 2006 Index 265.2
July 2006 Index 264.0
June 2006 Index 263.0
May 2006 Index 262.1
April 2006 Index 262.1
March 2006 Index 262.1
Febuary 2006 Index 261.2
January 2006 Index 260.2
December 2005 Index 258.1
November 2005 Index&nbsp ; 256.1

Please click below on Related Document to view a detailed calculation of the&nbsp ; MDM Inflation Index for November 2006, listing the ten …

Economic Trends

U.S. Wholesale Revenues Up 1% from October

Sales

November 2006 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $331.3 billion, up 1.0% (+/-0.5%) from the revised October level and were up 7.9% (+/-1.2%) from the November 2005 level. The October preliminary estimate was revised upward $0.4 billion or 0.1%. November sales of durable goods increased 1.2% (+/-0.8%) from last month and were up 7.7% (+/-1.8%) from a year ago.&nbsp ;

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Compared to last month, sales of motor vehicle and motor vehicle parts and supplies were up 5.0% and sales of electrical and electronic goods increased 2.9 %. November sales of nondurable goods were up 0.7% (+/-0.7%) …

Economic Trends

Machine Tool Consumption Down 12% From October

November U.S. manufacturing technology consumption totaled $335.02 million, according to AMTDA, the American Machine Tool Distributors’ Association, and AMT – The Association for Manufacturing Technology.

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This total, as reported by companies participating in the USMTC program, was down 12.3% from October, but up 32.7% from the total of $252.38 million reported for November 2005. With a year-to-date total of $3,549.90 million, 2006 was up 29.4% compared with 2005.

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These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.

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Though below the exceptional September peak, the November results continue to show strong purchases of advanced …

Free

Commentary: HD Supply Strategy Bigger Than One Guy

Hype and speculation tend to follow an industry consolidator. The announcement last week that Home Depot CEO Bob Nardelli was ousted from his position over pay issues and lagging stock gains generated an inordinate amount of buzz. Some even claimed it is a repudiation of the Home Depot model itself and its relatively recent strategy to aggressively grow the wholesale distribution division.

Hardly. All we know versus a week ago is that HD has $210 million less to fund acquisition activities that instead went to Mr. Nardelli’s severance package (Wouldn’t you like to be chastised like that?). Now that will really slow the acquisition pace of HD Supply….

What’s lost in the shock value of the pay deal is that Home Depot’s net income in the most recent quarter, ended …

Management

Private Label Use to Grow

Private label products—products branded by a wholesaler-distributor—represent a break from the more traditional wholesale distribution approach of reselling manufacturers' branded products. In our new research study, Facing the Forces of Change^®: Lead the Way in the Supply Chain, we found that private label strategies by wholesaler-distributors will expand substantially over the next five years.

Private labels will strengthen wholesaler-distributors' relationships with their customers. However, they will strain distributors' relationships with their suppliers by challenging the wholesale distribution channel's traditional …

Research & Analytics

Single-Sourcing on a Smaller Scale

1sourcesupplies is an alliance of distributors who want to offer single-sourcing programs to smaller customers, including inventory management, supply chain automation, streamlined billing and information analysis.

Mark Hill’s cutting tool distributorship, I.M.C. Supply Co., Memphis, TN, lost its biggest customer in 1997. The customer we lost really wanted us to have their business, but we didn’t have the programs they needed, Hill says.

Instead of folding, or scrambling to make ends meet, Hill pushed forward with a plan to find a way to offer single-sourcing solutions to his customers. Since that year, his business has doubled. About 65 percent of his business is now single-source.

Hill has decided to pass on his newfound knowledge in the form of a …

Building Materials/Construction

Construction to Moderate in 2007

Overall U.S. construction in 2007 is forecast to slow from previous levels, thanks to a downturn in residential building, according to recent reports. But nonresidential construction should stay relatively strong in the new year, with institutional and commercial building leading the way.

McGraw-Hill Construction reports total construction starts will drop 1 percent in 2007. Housing starts will fall 5 percent, with both single and multifamily housing taking a hit.

A large backlog in unsold homes suggests home construction may be slow to turn around, but most analysts expect declines to moderate in 2007, according to the Fed. Housing demand may also improve in 2007.

McGraw-Hill reports that retail construction will decline as housing starts slow. Retail …

Companies

MSC Keeps Eye on ISM Index

MSC Industrial Direct Inc., Melville, NY, said in a recent conference call with investors that it has seen a slowdown in revenue growth in the past few months.

We’re mindful of the ISM index and its historic correlation to our growth rate, CEO David Sandler said of the Institute for Supply Management’s monthly manufacturing report. While we believe a number of marketing and sales initiatives will moderate its impact … it is apparent that three to six months of ISM weakness has modestly affected our revenue growth and will probably continue to do so in the next couple of quarters if past experience proves out.”

Still, thanks in part to its acquisition of J & L Industrial Supply last year from Kennametal, the industrial MRO distributor recorded an increase in sales …

Economic Trends

Canadian Industrial Price Index Unchanged in November

Prices for manufactured goods in Canada remained unchanged for a second consecutive month in November, while prices for raw materials increased after three months of significant declines.

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Prices charged by manufacturers, as measured by the Industrial Product Price Index (IPPI), were unchanged from October to November, as downward pressure from declining petroleum prices eased. Lower prices for primary metal products and petroleum products were offset by higher prices for chemical products, fruit, vegetables and feed products and pulp and paper products.

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The 12-month change in the IPPI was up&nbsp ; 1.9%, a higher rate of growth compared to the year-over-year increase of&nbsp ; 1.2% in October. Upward pressure came mainly from higher …

Building Materials/Construction

Construction Spending Generally Flat Oct.-Nov.

Construction spending during November 2006 was estimated at a seasonally adjusted annual rate of $1,184.1 billion, 0.2 percent below the revised October estimate of $1,186.7 billion. The November figure is 0.1 percent above the November 2005 estimate of $1,183.1 billion.

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During the first 11 months of this year, construction spending amounted to $1,110.5 billion, 5.4 percent above the $1,053.4 billion for the same period in 2005.

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Private Construction

Spending on private construction was at a seasonally adjusted annual rate of $905.8 billion, 0.6 percent below the revised October estimate of $911.0 billion. Residential construction was at a seasonally adjusted annual rate of $589.3 billion in November, 1.6 percent …

Economic Trends

Manufacturing Expands in December

Economic activity in the manufacturing sector expanded in December following a one-month decline, while the overall economy grew for the 62nd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.

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ISM reported that manufacturing proved resilient in December, as the PMI returned to growth registering 51.4 percent after a decline (under 50 percent) in November. Both New Orders and Production made significant gains to drive the PMI back above the breakeven point. Manufacturing employment remained relatively unchanged as the Employment Index shows a negligible change for the second consecutive month.

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The Prices Index is trending downward, relieving some of the inflationary pressure that …

Investment Banking Directory

Work with a banking partner that knows your business. Get detailed information on investment banks with expertise in the wholesale distribution industry.

In Pursuit of Practicality: 52 real use cases for AI in wholesale distribution today

This multi-month research effort includes surveys, interviews, extensive publication scanning, and deep synthesis to…

Essential Financial KPIs – Unlock the Power of Financial Metrics

This new guide from MDM provides real-world examples from companies that recently innovated on…

MDM Guide: Tailor Your Tech Strategy to Win in Any Market

This new guide from MDM provides real-world examples from companies that recently innovated on…

A True Business License Compliance Framework Guide

Avalara solutions enable companies to centralize their business licenses, standardize their workflow for obtaining…

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How Are Distributors Combatting Higher Costs from Tariffs? Here’s What They Told Us

Meet MDM’s 2025 Women in Distribution

MDM Forecast: April 2025 Update

QXO Confirms Plans to Rebrand Beacon

A Few Words on Elasticity, the Future of Tariffs and Distributors’ Response

From Niche to Necessary: The Business Case for Women-Specific PPE

Prize Claimed: Here’s Why QXO Relentlessly Pursued Beacon

What Distributors Pay Their Fleet Drivers, Managers

MDM Forecast: March 2025 Update

Beyond Supply: How Distributors Can Add Value as an Information Hub Amid Tariff Turmoil

ECONOMIC OUTLOOK REPORTS

2024 Annual MDM Economic Outlook

Premium Monthly

MDM March 2025 Premium Monthly

Market Insight Reports

MDM 1Q25 Forecast Report

MDM 4Q24 MarketPulse Report

Case Studies

MDM Case Study: MSC Industrial Supply

MDM Case Study: Watsco

Investment Banking Directory

In Pursuit of Practicality: 52 real use cases for AI in wholesale distribution today

Essential Financial KPIs – Unlock the Power of Financial Metrics

MDM Guide: Tailor Your Tech Strategy to Win in Any Market

A True Business License Compliance Framework Guide

Market Prospector

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