The growth in Q2 digital sales, which Fastenal defines as web sales occurring on Fastenal.com and sales through its internet-connected vending machines at customer locations and vendor-managed inventory programs, wasn’t as robust as in the first quarter. The main reason: COVID 19.

The second quarter was another solid one for digital growth for Fastenal Co., a wholesale distributor of industrial and construction supplies.

But the growth in digital sales, which Fastenal defines as web sales occurring on Fastenal.com and sales through its internet-connected vending machines at customer locations and vendor-managed inventory programs, wasn’t as robust as in the first quarter.

The main reason: COVID 19. In the second quarter ended June 30, digital sales for Fastenal grew year over year by 13.5%, although the company didn’t break specific metrics. In comparison, total sales increased 10.3% to $1.509 billion from $1.368 billion in the second quarter of 2019.

For the six months ended June 30, total sales grew year over year by 7.6% to $2.876 billion from $2.677 billion. Net earnings for the second quarter was $238.9 million compared with $204.6 million for the second quarter of 2019. Net earnings for the first six months were $441.5 million vs. $398.7 million in the first six months of the prior year.

In the first quarter ecommerce sales grew 27%, bringing sales on Fastenal.com to a record 10% of total sales in March. Other internet-based sales, such as vending machines, brought ecommerce to 35% of total sales. Fastenal said first quarter ecommerce sales accounted for 35% of total sales, or $478.45 million.

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Limiting product

But the growth in digital sales, while robust, was still slower than in the first quarter in particular because the company limited the sales of some widely demanded safety and personal protective equipment products, Fastenal CEO Dan Florness told analysts on the company’s second quarter earnings call based on a transcript from SeekingAlpha.com.

“One thing that hurt our e-commerce numbers during the product is we put in place a very strict allocation process for our COVID-19 products,” Florness said. “I think mask, I think face shield, I think thermometers, sanitation products et cetera, so that we essentially shut that product off from buying electronically and you had to call the branch or call your contact to source.”

The coronavirus is impacting ecommerce because Fastenal is making ongoing adjustments to its supply chain to ensure adequate supplies of certain materials, he told analysts. “That was our best means to manage our supply chain of that product, so we had a stable supply for everybody,” Florness said.

Going forward, Fastental says its ecommerce strategy will focus on customer relationships and supply chain management compared with just a central focus on digital transactions.

“One of the reasons, our e-commerce numbers are different than our peers is most of the products our customers buy from us, they don’t order,” Florness said. “It’s there when they need it—it might be a vending machine, it might be in a bin, it might be on production floor. We know their needs.”

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