The year thus far has been a yo-yo for distributors wrestling with a business world that’s going through a sea change, from how companies of all sizes used to operate, to a time when digital commerce — and transformation — are the way of the future.
But so far, distributors seem to be coping quite well with major economic and ecommerce challenges. Those range from supply chain disruption and a tight labor market to high inflation and the ongoing COVID-19 pandemic.
That’s evident in how distributors and wholesalers are doing with sales. And so far in 2022 it’s going well, based on monthly data from The U.S. Department of Commerce.
For the first six months of the year, the combined sales of all U.S. wholesalers and distributors increased year over year to $4.126 trillion. That’s up 22.1% from $3.380 billion in the first six months of 2021, according to the Department of Commerce.
For the second quarter ended June 30, 2022, distributor sales were strong. They grew about 21% to $2.10 trillion from $1.77 trillion in Q2 2021.
Manufacturers, distributors and ecommerce sales
The Department of Commerce does not break out ecommerce sales in its monthly reporting of manufacturer and distributor sales. But the second-quarter and six-month ecommerce sales of big public distribution companies mirror the trend of growing digital sales for distributors and wholesalers.
For example, W.W. Grainger did not break out the company’s total Q2 ecommerce sales. In recent years, it has said ecommerce represents about 60% or more of total sales. Based on those figures, Grainger’s total ecommerce sales were about $2.34 billion. That’s up 21.9% from about $1.92 billion a year earlier.
“We’ve seen nice increases in average order value” at Zoro, Grainger CEO DG Macpherson said on a recent earnings call. “We expect that to continue to get a little better as we continue to refine our processes to get more repeat business from those business customers.”
At Global Industrial Inc., sales for the second quarter ended June 30 increased 16.8% year over year to a record $318.5 million. Global Industrial does more than half of its customer transactions through digital commerce.
CEO Barry Litwin, speaking to investment analysts on an earnings call, attributed the quarter’s financial performance to “key digital sales, marketing, and distribution initiatives. We believe these investments will strengthen our competitive position and help us drive growth and capture additional market share in the highly fragmented industrial distribution space.”
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