The coronavirus pandemic is disrupting B2B ecommerce and creating reams of immediate and longer-term challenges for distributors.
But at the same time, the bread-and-butter business of running ecommerce and a broader distribution company also continues.
A case in point is Fastenal Co., a wholesale distributor of products ranging from construction fasteners to water pumps to 3D printers.
Last week, Fastenal—which grew electronic commerce sales in 2019 to an estimated 3% of total sales (about $160 million) and reported 32% growth in all electronic sales through its internet-connected vending machines, ecommerce sales from Fastenal.com and electronic data interchange—made a big move to bolster its vending machine business.
Fastenal is spending an undisclosed amount to purchase certain assets of Apex Industrial Technologies LLC, an automated point-of-use dispensing and supply chain technology development company based in Mason, Ohio.
Since 2008, Apex has worked with Fastenal to create and develop the software, design the equipment and build the equipment Fastenal has used to deploy internet-connected vending machines used for selling products at customer locations both in the United States and overseas, Fastenal says in a new filing with the U.S. Securities and Exchange Commission.
Since 2008, Fastenal and Apex have built and deployed more than more than 105,000 product dispensing and leased devices across 23 device types in 25 countries, generating more than $1.1 billion in sales in 2019, Fastenal says. In its deal to purchase certain assets from Apex, Fastenal is acquiring “patents, designs, software and licenses, as well as direct access to the supply chain,” the distributor says in its filing.
“Our relationship with Apex in 2008 helped to make the industrial vending solution scalable,” says Fastenal president and CEO Dan Florness. “This transaction allows both organizations to move forward with their unique strategic plans while still providing an avenue for additional collaboration.”
Fastenal, based in Winona, Minnesota., operates a diversified vending machine business. For example, about 50% of all sales of safety products occur its vending machines, the company says. “We estimate the market could support as many as 1.7 million industrial vending devices, and as a result we anticipate continued growth in installed devices over time. We anticipate signing 22,000 to 24,000 new devices in 2020,” the company says in its most recent annual report.
Fastenal deploys industrial vending machines consisting of 23 different vending devices, the company says. Depending upon the type of vending machine, monthly revenue per-machine averages from about $1,000 to $3,000, Fastenal says.
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