Fastenal Co., a distributor of industrial and metal working supplies, finished digital commerce in fine fettle in 2022.
The company generates digital sales through multiple channels including internet vending machines, ecommerce and electronic data interchange. Its overall digital sales new represent a significant share of total revenue.
“2022 was a year of milestones,” the company says. “Our ecommerce revenues surpassed $1 billion of sales, our international sales exceeded $1 billion and our company-wide net earnings topped $1 billion.”
Overall for the year ended Dec. 31, 2022, Fastenal reported an increase in total sales to $6.980 billion. That’s up 16% from $6.010 billion in 2021. Meanwhile, ecommerce sales were $1.07 billion, compared with $925.1 million in 2021. Based on $1 billion in ecommerce sales, Digital Commerce 360 projects that ecommerce accounted for about 14% of all sales.
Fastenal includes in its overall digital footprint ecommerce sales along with customer transactions processed through its FMI inventory management programs, including FASTtock, FASTbin and its FASTVend internet-connected vending machines. The company’s digital footprint in the fourth quarter of 2022 represented 52.6% of total sales. That is an increase from 46.4% of sales in the fourth quarter of 2021.
Fastenal is growing out its digital footprint in large measure because of customer demand, says Edwards Jones research analyst Jeff Windau.
“Since 2015, we have seen a steady reduction in our traditional branches, primarily within the United States,” Fastenal says. “Our focus on on-sites, shifting branch priorities, and the supply chain tools comprising our digital footprint have provided opportunities for network consolidation.”
Fastenal now operates 1,683 branches in North America, a 2% decline from the previous year.
For the fourth quarter, Fastenal reported:
- Total sales of $1.695 billion, up 10.7% from $1.531 billion in Q4 2021.
- Net earnings were $245.6 million, up from $231.2 million in the prior-year period.
- Daily ecommerce sales grew 48.2% and represented 20.1% ($340.7 million) of total Fastenal revenue.
“We anticipate we will hit 65% of our sales running through our digital footprint in 2023,” Fastenal says.
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