Companies in this sector distribute nondurable or durable goods, typically specializing by product category. Major US distributors include Avnet (electronics), McKesson (drugs), and SYSCO (foods); top companies based outside the US include Brenntag (Germany, chemicals), Medipal (Japan, drug and household products), and WPG (Taiwan, electronic components).
For most distributors, demand is closely linked to local economic activity. The profitability of individual companies depends on efficient inventory management and order fulfillment operations. Large companies can supply customers with a wider range of goods and in more markets, but smaller distributors can compete successfully by carrying specialty products or providing add-on services. In the US, the industry is highly fragmented: the 50 largest distributors generate about 25% of industry revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
The major segments of the US wholesale sector are distribution of nondurable goods (about 52% of industry revenue) and durable goods (about 48%). Leading categories of nondurable goods are groceries, petroleum products, and drugs. The largest durable goods categories are electrical goods and electronics, professional and commercial equipment, machinery, and motor vehicles and parts.