H & L Advantage - Grandville, Michigan, United States

The US electrical, plumbing, and hardware distributors industry includes about 20,000 firms with combined annual revenue of about $215 billion. Major companies include Ace Hardware, Anixter, Graybar Electric, True Value, and WESCO International. The hardware, plumbing, and heating equipment and supplies segment of the industry is fragmented: the 50 largest companies generate about 45 percent of revenue. The electrical apparatus and equipment, wiring supplies, and related equipment segment is more concentrated: the 50 largest companies generate about 50 percent of revenue.

COMPETITIVE LANDSCAPE

Sales are driven by demand from the construction, telecommunications, and hardware retailing industries. Profitability depends largely on merchandising and efficient inventory management. Large companies have wide distribution networks and may offer customers a broad selection of products and services. Small operators can compete successfully by stocking specialty products, stocking all of the parts their particular customers need, or delivering superior service. The industry is capital-intensive: average annual revenue per employee for hardware and plumbing distributors is about $460,000, while the average revenue per employee for electrical distributors is about $775,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Distributors are middlemen between manufacturers and end-users. The companies in this industry buy large quantities of products from hundreds of manufacturers, then "break bulk" and resell them to thousands of customers. This practice allows customers to buy small quantities of products from many different manufacturers. Products may include wire, cable, wiring devices, fiber optic products, electrical connectors, bolts, fittings, screws, and ...

• State job growth rose 1.6% in February 2012 from a year ago; national job growth rose 1.6%
• State unemployment averaged 9.4% in February 2012; the national average was 8.3%
• Personal income rose 4.3% to $364.3 billion in Q4 2011 from a year ago.
• Tax revenue decreased 1.7% in Q4 2011 from a year ago.
• Exports rose 17.8% to $11.9 billion in the first two months of 2012 from a year ago.
• Venture capital investment in MI rose 6.4% to $23.7 million in Q4 2011 from a year ago.