Industrial Supply 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 5,800 industrial supply distributors in the US purchase maintenance, repair, operating, and production (MROP) supplies in bulk and resell them to customers in smaller quantities. Product categories include abrasives, strapping, tape, and inks; mechanical power transmission supplies; industrial containers and supplies; industrial valves and fittings; and welding supplies. Distributors may offer technical support, repair, or assembly services.
Offshore Production
Offshoring of manufacturing production to low-wage countries reduced demand for domestic industrial supply distributors.
Growth in Green
The growing interest in the environment and energy efficiency has created a demand for “green” products and expertise.
Industry size & Structure
A typical industrial supply distributor operates out of a single location, employs 18 workers, and generates $11-12 million annually.
- The industrial supply distributor industry comprises about 5,800 companies that employ 105,000 workers and generate $64 billion annually.
- Customer categories include manufacturers (OEMs), institutions, government, utilities, construction, and mining.
- Large broad-line distributors carry over 1 million SKUs purchased from thousands of suppliers.
- Large domestic companies include W.W. Grainger, HD Supply, and Airgas.
Industry Forecast
Industrial Supply Distributors Industry Growth
Recent Developments
Feb 8, 2025 - New Highs for Prices and Wages
- Producer prices for machinery and supply wholesalers reached a new high in December, rising 4.8% compared to a year ago, according to the latest US Bureau of Labor Statistics data. Sales for machinery and equipment wholesalers rose 0.9% year over year in November but fell 13.8% versus October, according to the Census Bureau. Meanwhile, inventories continued to rise, up 6.1% YoY in November, approaching record high levels. Employment by industrial supply distributors grew 0.6% YoY in November, while average industry wages climbed 8.5% over the same period to a new high of $30.36 per hour, BLS data show.
- The US manufacturing sector – a driver of demand for industrial supplies – began 2025 on a long-awaited positive note, with economic activity in the sector expanding in January following 26 consecutive months of contraction, according to the latest Manufacturing ISM Report On Business, which surveys US supply executives. “Demand clearly improved, while output expanded and inputs remained accommodative,” the Institute for Supply Management's (ISM) Timothy R. Fiore, chair’s ISM’s Business Survey Committee, said. The Manufacturing PMI registered 50.9% (above 50 indicates expansion) in January, 1.7% higher compared to the seasonally adjusted 49.2% recorded in December. Per ISM’s January report, demand and production improved, and employment expanded. The eight manufacturing industries reporting growth in January (in order) were: Textile Mills; Primary Metals; Petroleum & Coal Products; Chemical Products; Machinery; Transportation Equipment; Plastics & Rubber Products; and Electrical Equipment, Appliances & Components. Eight industries reported contraction including Nonmetallic Mineral Products and Wood Products.
- Activity in the US manufacturing sector contracted in November for the eighth consecutive month and the 24th time in the last 25 months, as reported by US supply executives in the latest Manufacturing ISM Report On Business. The Manufacturing PMI registered 48.4% in November, 1.9% higher compared to the 46.5% recorded in October. The Supplier Deliveries Index signaled faster deliveries, registering 48.7%, 3.3% lower than the 52% recorded in October. (Supplier Deliveries is the only ISM Report On Business index that is inverse; meaning a reading of above 50% indicates slower deliveries, which is typical as the economy improves and customer demand increases.) Meanwhile, the Inventories Index registered 48.1%, up 5.5% compared to October. Demand remained weak in November as companies planned for 2025 in the aftermath of the election. Tariffs, threatened by President-elect Trump, may spur reshoring benefitting industry supply distributors.
- US wholesale prices rose by a larger-than-expected 2.6% in June from a year earlier, a sign that some inflation pressures remain elevated, according to the Labor Department. The June rise in wholesale prices was the sharpest year-over-year increase since March 2023 and comes at a time when other price indicators show that inflation has continued to ease. Month over month, the producer price index rose 0.2% in June versus May. The June increase in wholesale inflation was driven by a 0.6% rise in services prices, led by higher profit margins for machinery and auto wholesalers, according to the Labor Department.
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