Industrial Machinery 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 20,100 Industrial machinery distributors in the US sell parts, tools, and machines produced by various manufacturers. They serve as a source of machinery products to manufacturing and institutional customers who need them for their own operations. Customers include industrial manufacturers, food processors, government entities, and energy companies.
Forward Integration By Manufacturers
Industrial machinery distributors typically carry a broad range of products from a variety of manufacturers.
Joint Ventures Support Expansion
Beyond increasing product offerings, large industrial machinery distributors are fueling growth primarily through acquiring or entering into joint ventures with small or regional companies.
Industry size & Structure
The average industrial machinery distributor generates $9-10 million in revenue and has about 17 employees.
- About 20,100 firms in the industry operate 27,200 establishments, employ 340,000 workers and generate $192 billion in annual revenue.
- 83% of firms have less than 20 employees.
- They must invest heavily in real estate to house inventory and may have facilities from 1,400 square feet to 1.5 million square feet for the largest distributors.
- The largest firms in the industry include Grainger, Veritiv, MSC Industrial Supply Company, Pentair, and Sumitomo Corporation.
Industry Forecast
Industrial Machinery Distributors Industry Growth
Recent Developments
Jun 30, 2024 - Employment and Wages Rising
- According to the latest US Bureau of Labor Statistics data, employment by industrial machinery distributors ticked up 1.1% in April compared to a year ago, while average industry wages rose 3.8% over the same period to $35.86 per hour. Machinery and supply wholesalers face rising payroll costs amid declining sales and prices and swelling inventories, putting pressure on profit margins.
- Distributors of industrial machinery considering electrifying their fleets will want to take note of a new analysis from Ryder showing that operating expenses of low-emissions rigs are far higher than those for diesel trucks, The Wall Street Journal reported in May. The truck leasing company found that as trucks get heavier, the difference in operating costs between battery-electric vehicles and diesel trucks grows more pronounced, with annual costs of operating battery-electric big rigs about twice as expensive as diesel trucks, per Ryder’s analysis. Because battery-electric trucks are heavier than diesel trucks and require several hours to recharge, companies need more vehicles and drivers to haul the same volume of freight as a diesel truck. The Ryder analysis estimated that a company would need nearly two battery-electric big rigs and more than two drivers to equal the output of a single heavy-duty diesel truck, WSJ reports.
- As of May 31, 2024, employees of industrial machinery distributors and other private enterprises may select a third-party advocate to accompany them on an OSHA safety inspection, Facilities Dive reports. According to OSHA, its updated Worker Walkaround Rule will improve inspections by increasing worker representation and making it easier for OSHA compliance officers to gather more information about workplace safety. However, the National Association of Wholesaler-Distributors (NAW), along with other employer groups, have joined a lawsuit opposing the rule, which they say expands third-party access to NAW member warehouses during OSHA inspections. In a press release stating its opposition, NAW called the final rule a “pro-union power grab by the Biden Administration” that lacks real safeguards for employers and employees.
- The collapse of the Francis Scott Key bridge will impact US supply chains operating in and out of the Port of Baltimore, OEM Off-Highway reported in April. In 2023, the Baltimore port was No. 1 in the country for farm machinery imports and exports ($5 billion) and third for construction machinery ($6.6 billion), according to the US Census Bureau, with imports of construction machinery exceeding exports by a factor of more than five. Baltimore serves as a key port for imports of vehicles from Europe and China. Specifically, the port’s closure will impact the off-highway vehicle supply chain by lengthening delivery times, increasing costs for specific equipment types, and increasing prices to compensate for costs incurred by changes to the logistics network, per OEM Off-Highway. Maryland lawmakers have approved emergency legislation – The Port Act – to help workers and businesses impacted by the bridge’s collapse.
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