Electrical Equipment Distributors

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 8,000 electrical equipment and parts distributors in the US consolidate products across many manufacturers to offer customers wide selections, reasonable prices, and a single point of contact. Major product categories include switchgear and switchboard apparatus; wiring and cable; lighting fixtures; industrial controls; conduit, raceway, and fittings; power and distribution transformers; and motors and generators.

Competition from Alternative Channels 

Electrical products are available through a wide variety of channels, including manufacturers, retailers, energy service companies (ESCOs), product specialists, niche service distributors, and distributors of other trades.

Counterfeit Electrical Products

Counterfeit electrical products, often produced outside the US, have infiltrated the supply chain and are raising distributors’ liability risk.

Industry size & Structure

A typical electrical distributor operates out of a single location, employs about 21 workers, and generates about $16 million in annual revenue.

    • The electrical distribution industry consists of about 8,000 companies which generate $132 billion annually and employ 171,600 workers.
    • Most electrical distributors are small, independent operations - 56% of electrical distributors have a single location and 68% employ fewer than 10 workers.
    • Customers include building contractors (29% of sales), other wholesalers and distributors (24%), industrial businesses (10%), retailers (8%), businesses for their own use (19%), and government (4%).
    • Large companies include International Electric Supplies, Rexel (Gexpro), Sonepar USA, WESCO Distribution, Graybar Electric, and Consolidated Electrical Distributors.
                                  Industry Forecast
                                  Electrical Equipment Distributors Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  Apr 1, 2022 - Manufacturing Slows In China
                                  • Electrical equipment distributors may have difficulty getting imported products due to going supply chain issues. China’s manufacturing output slowed in March 2022 as the country’s zero-tolerance approach to the pandemic forced factories into temporary shutdowns, according to The Wall Street Journal. China’s purchasing managers index for the manufacturing sector fell to a March reading of 49.5 from 50.2 in February, according to the National Statistics Bureau. A reading below 50 suggests output is contracting rather than expanding.
                                  • Electrical equipment distributors may face higher costs for and shortages of imported products despite the reopening of factories in Asia. Overall US imports slowed during the pandemic, in large part due to port congestion at the San Pedro Bay ports of Los Angeles and Long Beach. Labor and equipment shortages at West Coast ports have also contributed to the bottlenecks that persisted for a year. However, there are signs that the congestion is easing as some containerships have been re-routed to ports on the East and Gulf coasts. Improved retailer inventories and the potential for a pullback in consumer spending due to rising interest rates may also help reduce supply chain snarls, according to The Loadstar.
                                  • Total construction spending increased 0.5% in value month over month on an adjusted basis and 11% in value year over year on an unadjusted basis in February 2022, according to the US Census Bureau. Residential construction spending increased 1.1% month over month and 16% year over year in February. Nonresidential construction spending decreased 0.1% month over month but rose 6.6% year over year in December.
                                  • Employment in the electrical equipment distributor industry increased 4% year over year in February 2022 and was up 0.3% from the pre-pandemic month of February 2020.
                                  • Russia’s invasion of Ukraine has the potential to make the global semiconductor shortage worse. Two companies in Ukraine – Ingas and Cryoin - produce about 45% to 54% of the world’s semiconductor-grade neon, according to Reuters analysis of the companies’ data and market research firm Techcet. Neon is used in lasers that aid in semiconductor design. Russia produces more than 35% of the world’s palladium, according to Techcet. Palladium is used to manufacture sensor chips and specific types of computer memory. Ingas and Cryoin have ceased all production amid increased attacks by Russian forces.
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