Computer & Office Equipment Distributors
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 7,300 computer and office equipment distributors in the US serve as middlemen between manufacturers and retailers/resellers and end-users. Major revenue categories include computers, computer peripheral devices, office equipment, and computer software. Office equipment includes copiers, point-of-sale terminals (POS), automated teller machines (ATMs), cash registers, mailing machines and check handling machines. Companies may also provide services, such as repair, maintenance, technical support, systems assembly, systems integration, and training.
Rapidly Changing Technology
The IT arena is characterized by rapid change in technology and evolving industry standards and product specification requirements.
Price-Based Competition
Intense price-based competition in the information technology products and services market creates consistent pressure on margins.
Industry size & Structure
The average computer and computer peripheral distributor operates out of a single location, employs fewer than 20 workers, and generates about $46 million annually. The average office equipment distributor also operates out of a single location and employs fewer than 20 workers, but generates about $18 million annually.
- The computer and office equipment distribution industry consists of about 7,300 firms that employ about 306,000 workers and generate about $290 billion annually.
- Computer and computer peripheral distributors account for 73% of firms and 88% of industry revenue.
- The industry is concentrated; the top 50 computer and computer peripheral distributors account for about 76% of category revenue and the top 50 office equipment distributors account for about 77% of category revenue.
- Large companies, which include Ingram Micro, Tech Data, and SYNNEX, may have international operations. Computer and office equipment manufacturers may have distribution operations.
Industry Forecast
Computer & Office Equipment Distributors Industry Growth
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Recent Developments
Sep 3, 2024 - Workplace Occupancy Falls Below 50% Again
- Workplace occupancy, an indicator of demand for office equipment, was 47.2% for the seven-day period ending on August 21, down from 50.2% for the seven-day period ending on July 31, according to data gathered from swipes of access control cards in buildings with security systems provided by Kastle Systems. Occupancy rarely hit the 50% mark from the early days of the coronavirus pandemic through early 2024 despite attempts by many organizations to bring employees back. The Houston, TX, metropolitan area had the highest occupancy for the seven-day period ending on August 21 at 61.2%. The Chicago, IL, metropolitan area trailed all others tracked at 37.1%.
- The total amount of office space vacated since 2019 surpasses the amount vacated during the dot-com bubble and dwarfs that of the global financial crisis of 2007-08, according to real estate analysis firm Green Street. Computer and office equipment distributors may be negatively impacted by decreasing demand for office space. Available office space was about 25% of existing supply at the end of 2023, both historic highs. Prior recoveries in US office occupancy have been mostly “V-shaped” in nature - a sharp rebound from a big decrease. This cycle is likely to play out differently, however, as it will take a lot more new jobs to generate the same level of office demand as in the past because remote work will act as a long-term headwind on office demand, according to Green Street.
- Global merger and acquisition (M&A) activity decreased 15% year over year during the second quarter of 2024, according to GlobalData. M&A activity may affect demand for computer and office equipment. The combination of high interest rates, current valuations, and political uncertainty have negatively impacted M&A activity, according to GlobalData, but a rebound may begin before the end of the year. "Prospects of rate cuts in certain markets and an overall improving global growth outlook could drive increased activity," said Priya Toppo, Analyst at GlobalData's Thematic Intelligence. "However, mega deals will continue to face significant challenges, especially in the US, where antitrust concerns are a key focus for regulators.”
- Computer and office equipment distributor industry employment and average wages for nonsupervisory employees increased slightly during the first six months of 2024, according to the US Bureau of Labor Statistics. Computer and office equipment industry sales are forecast to grow at a 3.2% compounded annual rate from 2024 to 2028, slower than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Industry sales have trended downward to pre-pandemic levels after peaking in March 2022, according to the US Census Bureau (CB). Inventories leveled off in late 2023 after a pandemic-driven increase but remain significantly above pre-pandemic levels, according to the CB.
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