Computer & Office Equipment Wholesalers
Description
Companies in this industry distribute computers, computer equipment, and packaged computer software, as well as office machines and equipment. Major US-based companies include Ingram Micro, ScanSource, Tech Data, and divisions of diversified electronics distributors such as Arrow Electronics and Avnet. Major companies based outside the US include ALSO (Switzerland), Digital China (China), Esprinet (Italy), and Redington (India).
Top-tier wholesalers have locations in dozens of countries and typically maintain major distribution centers in multiple nations. Emerging markets such as China and India are being targeted for industry growth.
The US computer and office equipment distribution industry includes about 17,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $300 billion.
COMPETITIVE LANDSCAPE
Demand is strongly affected by the level of business activity. The profitability of individual companies depends on merchandising and efficient operations. Large companies have economies of scale in purchasing. Smaller companies can compete effectively by offering specialty products or superior service. The US industry is concentrated: the top 50 companies account for nearly 80% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include copiers, parts and equipment (about 50% of industry revenue), computer peripheral equipment (about 20%), office equipment, ATM machine and shredders (about 20%), and computer printers (about 10%).
Distributors buy products from equipment manufacturers or importers and resell them to retailers, systems integrators, and value-added resellers, or directly to end-users. Distributors are especially important for small manufacturers that can't directly reach end-users. Most distributors operate one or more warehouses, but in some cases merely process orders shipped directly to customers from a manufacturer. Large warehouses exceed 100,000 square feet. Orders may be taken over the phone by a product specialist with technical knowledge, or received electronically over a website or by electronic data exchange (EDI). Companies monitor performance measures such as fill rate (the percentage of orders filled in a period of time, such as 24 hours) and stock-outs (how often ordered products are out of stock). Products typically are shipped using independent shipping companies.
To minimize inventories, purchases are made according to recent sales mix or only when requested by customers. Some distributors have price protection or stock rotation agreements with suppliers to protect them against declines in inventory value. Major suppliers include Cisco, Hewlett-Packard, IBM, Microsoft, Seagate, and Xerox. Trade shows are a major source of information about new products and suppliers. Large distributors may buy from several hundred suppliers and sell to thousands of customers, but many small distributors specialize in the products of just a few suppliers. Contracts with suppliers may designate a distributor as an "authorized distributor" and specify a sales territory, but contracts are often non-exclusive and can easily be canceled.
Top-tier wholesalers have locations in dozens of countries and typically maintain major distribution centers in multiple nations. Emerging markets such as China and India are being targeted for industry growth.
The US computer and office equipment distribution industry includes about 17,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $300 billion.
COMPETITIVE LANDSCAPE
Demand is strongly affected by the level of business activity. The profitability of individual companies depends on merchandising and efficient operations. Large companies have economies of scale in purchasing. Smaller companies can compete effectively by offering specialty products or superior service. The US industry is concentrated: the top 50 companies account for nearly 80% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include copiers, parts and equipment (about 50% of industry revenue), computer peripheral equipment (about 20%), office equipment, ATM machine and shredders (about 20%), and computer printers (about 10%).
Distributors buy products from equipment manufacturers or importers and resell them to retailers, systems integrators, and value-added resellers, or directly to end-users. Distributors are especially important for small manufacturers that can't directly reach end-users. Most distributors operate one or more warehouses, but in some cases merely process orders shipped directly to customers from a manufacturer. Large warehouses exceed 100,000 square feet. Orders may be taken over the phone by a product specialist with technical knowledge, or received electronically over a website or by electronic data exchange (EDI). Companies monitor performance measures such as fill rate (the percentage of orders filled in a period of time, such as 24 hours) and stock-outs (how often ordered products are out of stock). Products typically are shipped using independent shipping companies.
To minimize inventories, purchases are made according to recent sales mix or only when requested by customers. Some distributors have price protection or stock rotation agreements with suppliers to protect them against declines in inventory value. Major suppliers include Cisco, Hewlett-Packard, IBM, Microsoft, Seagate, and Xerox. Trade shows are a major source of information about new products and suppliers. Large distributors may buy from several hundred suppliers and sell to thousands of customers, but many small distributors specialize in the products of just a few suppliers. Contracts with suppliers may designate a distributor as an "authorized distributor" and specify a sales territory, but contracts are often non-exclusive and can easily be canceled.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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