A big public industrial supplies distributor is going increasingly digital. And the company — Fastenal Co. — plans to accelerate the process.
“Our ecommerce team hit a milestone,” Fastenal CEO Dan Florness told analysts on the company’s recent first quarter earnings call. “In March, we exceeded $100 million in revenue for the first time.”
Fastenal Q1 sales
For the first quarter ended March 31, Fastenal — which includes in its total digital sales footprint the sales occurring on Fastenal.com, through EDI and via internet-connected vending machines at customer locations and vendor-managed inventory programs — increased total sales by 20.3% to $1.704 billion from $1.417 billion in the first quarter of 2021. Net earnings in the first quarter were $269.6 million compared with $210.6 million in the first quarter of 2021.
In comparison, ecommerce sales — including transactions through Fastenal.com, EDI and other technical integrations — grew 55% year over year and represented 16.1% of all sales vs. 12.2% of all sales in Q1 2022. Based on these metrics, Digital Commerce 360 estimates that ecommerce sales for Fastenal increased to $274.3 million from about $172.9 million in the first quarter of 2021.
“It’s not too many years ago, I think it was 2011, when we pointed out the fact that international was now 10% of the company but still a relatively small piece and ecommerce was something we dabbled in, but it really wasn’t a thing,” Florness told analysts. “Times have changed in the last decade and now both of them are $100 million month businesses.”
For all digital channels, including Fastenal’s FMI program of internet-connected vending machines and vendor-managed inventory, electronic sales accounted for 47% of sales, or $800.08 million, compared with 39.1%, or 552.63 million in Q1 2020.
“If you roll up our FMI Technology in our ecommerce, we talk about our digital footprint. We hit 47% of sales in the quarter, 39.1% a year ago, 34.9% two years ago,” Florness said. “Our goal is to hit 55% of sales at some point later in the year and we still believe that long term, which has the potential to be 85% of sales, and we are gearing our supply chain and have been gearing our supply chains to support that kind of business in the future.”
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