Essendant Inc., a distributor of business and industrial products, has stepped up its focus on e-commerce in recent years. With its second-quarter overall sales slack and profits down, it’s not letting up on its drive toward more online sales.
That drive continue to pay off in the quarter ended June 30, when online sales grew 10.8% to $186.3 million, or 13.8% of total net sales. By comparison, total net sales inched up inched up 0.9% to $1.354 billion.
“We continue to view the trend in online as beneficial to Essendant over the long term, since our capability to drop ship and process orders ranging from full truckload to single orders is a competitive advantage for us,” senior vice president and chief financial officer Earl Shanks said on a conference with stock analysts today, according to a transcript provided by Seeking Alpha.
CEO Bob Aiken added that Essendant’s new online ordering platform for its customers—which lets customers use a single online interface to order items across multiple categories, and receive them in a single shipment and on a single invoice—has helped it to attract more and larger customers. The categories available through the new platform include office products, breakroom supplies, food services, and janitorial/sanitation supplies. “It expands our next-day fulfillment capability and broadens our product offerings to customers, many of whom have prioritized category expansion and fast delivery as the way to grow their sales in the marketplace,” Aiken said.
Essendant also sells industrial equipment to oilfield and welding operations through its ORS Nasco unit; automotive products through several automotive wholesale operations; and power tools to consumers through its CPO Commerce unit and the retail e-commerce site CPOoutlets.com. The 10.8% increase in online sales was across all operations, Essendant says.
Sales of office products increased 0.6% year over year to $725 million in the second quarter, and sales of automotive products increased 25.9% to $80.6 million. The increase in automotive category were concentrated in Essendant’s Medco unit, which it acquired in 2014.
Sales of industrial equipment fell 4.1% to $144.5 million, and, even with the acquisition of more customers, sales in the janitorial/sanitation category dipped 0.9% to $366.7 million.
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