Reinventing Industrial Distribution

Industrial Distribution just released its 61st Annual Survey of Distributor Operations. I wrote the Overview again this year, which you can access for free. You’ll have to pay for the full report, but it’s a worthwhile investment if you want to really understand this sector of wholesale distribution.

In reviewing the survey data, I was once again struck by the ingenious ways in which many industrial distributors are evolving to stay relevant in a shifting marketplace. I cover the industrial market in Chapter 7 of Facing the Forces of Change®: Lead the Way in the Supply Chain, so it was interesting to see some themes from my NAW report appear in the more granular results from the 61st Survey.

• One out of four industrial distributors is currently private-labeling products manufactured outside of the U.S., including 18 percent of distributors with revenues below $10 million.


• Many—but not all—industrial distributors are charging fees for their services rather than merely giving away “value added” and hoping to recoup the costs with product margins. Notable fee-based services mentioned by survey respondents include accelerated delivery time, set-up/ installation, and fabrication.
  
• Smaller distributors are more aggressively using the Internet to level the playing field when competing for new sales opportunities with larger competitors.

There are many other important trends covered in this study. I found the report to be especially helpful in understanding detailed responses by major product category as well as distributor size.

Hmmm, 2007 minus 61 equals 1946. I guess the survey is now officially a Baby Boomer!