Despite the headwinds that more than 400,000 U.S. wholesale distributors faced in 2024, they still managed to achieve some level of growth.
Fast forward through 2024 and into 2025, and uncertainty continues to challenge distributors of all sizes. The latest concerns revolve around the potential impact of a new administration, particularly regarding proposed tariffs: a 25% tariff on imports from Canada and Mexico and an additional 10% tariff on imports from China.
Beyond these geopolitical factors, distributors are grappling with ongoing challenges that emerged in the past year and show only moderate signs of improvement in the next 12 months. Inflation, while slowing in 2024, remains stubbornly high. According to the latest survey of professional economic forecasters from the Federal Reserve, the consumer price index is now expected to average 3% annually. That’s up from the previous forecast of 2.3%.
Distributors face economic and supply chain headwinds
Trade instability, inflation, and geopolitical tensions continue to challenge inventory management for distributors. Rising costs and unpredictable supply chains demand a proactive approach, requiring companies to optimize stock levels, mitigate expenses, and build resilient supply networks. Ongoing uncertainty surrounding tariffs, inflation, and broader economic conditions further complicates business planning and decision-making.
In this environment, manufacturers, distributors, and B2B retailers in the U.S. experienced only marginal sales growth in 2024, including ecommerce transactions.
Their total sales reached $22.517 trillion, a modest 1.9% increase from $22.088 trillion in 2023, according to the U.S. Department of Commerce.
Several factors contributed to this sluggish growth, including persistently high interest rates, election-related uncertainty, potential tariffs, and restrained corporate spending. These headwinds created a challenging environment for both traditional and ecommerce sales within the distribution sector.
Overall, distributor sales saw just a 1% increase, rising to $8.041 trillion year over year.
The traditional “crawl, walk, run” approach to business success is no longer viable in the fast-evolving B2B marketplace. Distributors must prioritize seamless, omnichannel experiences to meet the growing demands of modern buyers. Digital-first customers expect self-service portals, real-time inventory tracking, and streamlined order fulfillment. Companies that fail to adapt risk losing market share to more agile competitors.
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