Wholesale Sector

Wholesale Sector

Brief Excerpt from Industry Overview Chapter:

Companies in this sector distribute nondurable or durable goods, typically specializing by product category. Major US distributors include Avnet (electronics), McKesson (drugs and medical supplies), and Sysco (foods); top companies based outside the US include Brenntag (Germany, chemicals), Medipal (Japan, drug and household products), and WPG (Taiwan, electronic components).

COMPETITIVE LANDSCAPE

For most distributors, demand is closely linked to local economic activity. The profitability of individual companies depends on efficient inventory management and order fulfillment operations. Large companies can supply customers with a wider range of goods and in more markets, but smaller distributors can compete successfully by carrying specialty products or providing add-on services. In the US, the industry is fragmented: the 50 largest firms generate about 30% of industry revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

The US wholesale sector's major segments are nondurable goods (more than 40% of industry revenue) and durable goods (about 50%). Leading categories of nondurable goods are petroleum products, groceries, and drugs. The largest durable goods categories are motor vehicle and parts, household appliances and electronic goods, professional and commercial equipment, and machinery.