In this article we will present the 15 largest distribution companies in the world.
The distribution industry is one of the most important and integral industries in the world, which is the basis for the global supply, without which basically no industry could operate properly. So what exactly is a distribution company? A distribution company refers to a company which purchases products from one company, generally the manufacturer and provides them to the wholesalers and retailers. They generally operate on behalf of a company rather than representing themselves. This is why distributors are so important for any company or manufacturer, as distributors are the link between a manufacturer and the retailers and on some occasions, the end consumers as well.
Apart from being the link between manufacturers and customers, distributors are also extremely important because they can expedite response times, enhance the reach of a company due to their contacts and established presence in the field and the relevant geographical locations, and can also create value added products or combinations that can complement the products that the company is selling. While there are many calls for eliminating the ‘middle man’ in distributor companies and have the companies engage directly with the customers, due to the aforementioned reasons, that is a move that is not going to happen in the near future. I have worked with a company which provides its products in locations that it did not have a physical presence in i.e. it did not have an office or workers in the field, and instead liaisons with distributors with a presence in the country or countries, who provide the product. The distributors earn incentives which is the profit they make when selling on the products to the customers, while the company itself did not have to invest in advertising and promotion, office rent, capital equipment and saved on a lot of expenses, ensuring a win win for everyone.
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Of course, the importance of distributors in a global world and with global companies has been never more important then in the Covid-19 era. The Covid-19 pandemic is easily the worst pandemic in a century and has already infected over fifty million people as well as causing the deaths of at least 1.3 million people across the world. Faced with a disease of which a lot is so uncertain, even after we have become so technologically and scientifically advanced, most countries across the world were left with no option but to close their borders, their industries and everything within to try and stop the spreading of a disease for which there is no current, approved for the general population, cure. Due to the lockdown, supply chains were disrupted across the world, because of which distributors suffered as well and even essential industries which were allowed to operate had their activities disrupted as well. This is why many pharma companies have actually recorded much lower revenues than anticipated even though they were allowed to function through the pandemic as well. Now that the second wave has struck most of the world, and seems even worse than the first one in many countries, we are seeing restrictions start to creep back in our lives and this could lead to further disruptions as well. Due to the nature of the business, many distributors who continue business as usual may also harm and put their works at risk or risk losing business to many suppliers who have instead focused on more technology driven solutions. While many non essential or luxury industries have seen a drastic decrease in demand, many others such as the toilet paper industry and cleaning products have seen an exponential increase in demand.
Perhaps distributors should consider taking a look at previous such downturns and what has been done to counter these downturns while ensuring continuity for the business. Some of the actions that helped distributors recover faster during the Great Depression and other similar downturns include developing a nimble cost structure, improve cashflows and manage them a lot more carefully and diversifying their revenue streams so as not to be reliant on any one company or industry. Granted, the current pandemic is perhaps more significant than any other downturns and may have been more sudden than the other downturns, these tips should still help distributors survive the pandemic.
To determine the largest distributor companies in the world, we considered their revenues from both 2019 and 2018. We attributed 70% weightage to the former since that was the most recent and relevant metric. Where we’ve been able to, we have separated the revenues that pertain to distribution activities for companies that engage in other forms of business in addition to distribution as well. In the mean time, you might want to consider taking a look at the top 10 logistic companies in the world in 2019. So without further ado, let’s take a look at the largest distributor companies in the world, starting with number 15:
15. Wurth Industry North America
Revenue in 2019 (in billions of dollars): 2.15
Revenue in 2018 (in billions of dollars): 2.26
A privately owned company, Wurth Industry North America has had a decline in sales, unlike its parent company Wurth Group. We haven’t included Wurth Group in our list because it also has a large wholesale business from which a vast majority of its revenue is derived; otherwise it would have been in the top 4 in our list.
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14. Now Inc. (NYSE:DNOW)
Revenue in 2019 (in billions of dollars): 3.13
Revenue in 2018 (in billions of dollars): 2.95
Distribution Now is headquartered in Houston, Texas and is the newest company in this list, having only been founded in 2013. It is an industry leading provider in both industrial and energy products, and has locations in at least 20 countries across the world.
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13. MRC Global
Revenue in 2019 (in billions of dollars): 4.17
Revenue in 2018 (in billions of dollars): 2.15
MRC Global engages in the distribution of pipes, fitting products and valves.
Copyright: kzenon / 123RF Stock Photo
12. MSC Industrial Supply
Revenue in 2019 (in billions of dollars): 3.2
Revenue in 2018 (in billions of dollars): 3.36
MSC Industrial Supply is one of the largest distributors of industrial equipment in the entire world. The company was found nearly 80 years ago in 1941, and currently has over 6,000 employees. Headquartered in New York, the company has sales of over $3 billion.
Pixabay/Public Domain
11. Applied Industrial Technologies (NYSE:AIT)
Revenue in 2019 (in billions of dollars): 3.07
Revenue in 2018 (in billions of dollars): 3.47
Applied Industrial Technologies was founded 97 years ago in 1923, and currently has around 6,600 employees. The company has over 600 locations across the country, and is engaged in the business of distributing bearings, engineered power fluid components, power transmission products and many other industrial supplies. The company has grown significantly over the years, as the first year sales totaled just over $80,000. Since the 1990s, the company started to expand with medium sized acquisitions.
Pixabay/Public Domain
10. Winsupply
Revenue in 2019 (in billions of dollars): 3.66
Revenue in 2018 (in billions of dollars): 3.92
Winsupply is a wholesaler distributor and engages in the supply of plumbing, heating, ventilation, air conditioning and valves and fittings. The company was found in 1956, and has around 600 wholesaling locations in 45 of the 50 states in the US. It also has a total of 6,300 employees.
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9. Airgas
Revenue in 2019 (in billions of dollars): 6
Revenue in 2018 (in billions of dollars): 5.3
Airgas is a subsidiary of Air Liquide, which is a French giant, and supplies industrial, specialty and medical gases. The company was founded 38 years in 1982. In fact, it is considered to be one of the largest US suppliers of safety products, in addition to processing chemicals and supplying ammonia products. The company has around 18,000 employees and has 1,100 locations while it is headquartered in Pennsylvania.
Copyright: khunaspix / 123RF Stock Photo
8. Fastenal (NASDAQ: FAST)
Revenue in 2019 (in billions of dollars): 4.97
Revenue in 2018 (in billions of dollars): 5.4
Fastenal was founded 53 years ago in 1967, and is based in Winona, Minnesota. The company has over 2,200 branches present not just in the US but also in Puerto Rico, Canada, Mexico and even in Europe, as well as 13 distribution centers. It refers to itself as an industrial supply company, and is a very prominent sponsor of NASCAR and has been since 2006.
Pixabay/Public Domain
7. Motion Industries
Revenue in 2019 (in billions of dollars): 5.5
Revenue in 2018 (in billions of dollars): 6.53
Motion Industries is headquartered in Birmingham, Alabama, and is a subsidiary company of Genuine Parts Company, which is perhaps one of the least imaginatively named companies this side of Chinese state owned companies I have ever seen. The company has around 300,000 customers and has nearly 7,000 employees contributing in its annual revenue of $5.5 billion, which has fallen significantly from 2018.
Pixabay/Public Domain
6. HD Supply Holdings (NASDAQ:HDS)
Revenue in 2019 (in billions of dollars): 6.05
Revenue in 2018 (in billions of dollars): 7.4
HD Supply Holdings was founded in 1974 and has approximately 11,000 people. It was purchased by Home Depot in 1997 before being sold off to a private equity group in 2007, and was listed on the stock exchange in 2013.
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5. Wesco International (NYSE:WCC)
Revenue in 2019 (in billions of dollars): 8.18
Revenue in 2018 (in billions of dollars): 8.4
Wesco International is a Fortune 500 company located in Pittsburgh, Pennsylvania and is an electrical distribution and services company. The company was founded 98 years ago in 1922, and the company was listed in 1999. In addition to distribution services, the company also engages in manufacturing and its total revenue was $17 billion for 2019. The company has over 150,000 customers and 30,000 suppliers, while also employing 18,000 people. The company has 10 fully automated distribution centers while it also has 500 branches in America as well as internationally.
4. W.W. Grainger (NYSE:GWW)
Revenue in 2019 (in billions of dollars): 11.2
Revenue in 2018 (in billions of dollars): 11.7
Only the second US distribution company to make revenue in 11 figures is W.W. Grainger. The company was founded back in 1927 and celebrated its 93rd birthday this year. The company employs over 25,000 and had operating profits of $849 million in the latest year. It has nearly 3 million customers and is an industrial supply company engaged in supplying fasteners, tools, motors and lighting among many other offerings. In addition to an online presence, it also has a network consisting of 598 branches and 33 distribution services, which are integral in keeping up with the myriad customers that the company has.
During Covid, the company did attract negative publicity after being accused of price gouging, where the price of surgical masks had increased from $0.17 to $1, even though the company stated that the price increase was led by its suppliers. Later on, there was a partnership between Grainger, Tyvek, Dupont and the government was organized to ensure a smooth process of obtaining important material from other countries. In fact, the shipping time from the US to Vietnam and back was reduced from 90 days to just 10 days after this partnership went into effect.
Pixabay/Public Domain
3. Rexel
Revenue in 2019 (in billions of dollars): 15.8
Revenue in 2018 (in billions of dollars): 14
Rexel is a French company and the top three are all engaged in the distribution of electronic products, which is a very lucrative niche in the distribution industry due to high demand of such products. The company is headquartered in Paris, France and has over 26,000 employees. One of its many acquisitions is the supply arm of General Electric, one of the largest energy companies in the world.
Pixabay/Public Domain
2. Avnet (NASDAQ:AVT)
Revenue in 2019 (in billions of dollars): 19.5
Revenue in 2018 (in billions of dollars): 19
Avnet is the largest American distributor and just a decade ago was the largest distributor in the entire world. The company engages in the distribution of electronic products and is nearly a century old, having been founded in 1921. The company has been listed on the stock exchange since 1961, so for nearly 60 years.
Pixabay/ Public Domain
1. Sonepar
Revenue in 2019 (in billions of dollars): 24
Revenue in 2018 (in billions of dollars): 20.5
The only distributor company in the world with revenues topping $20 billion is Sonepar, the French giant which engages in distribution of electronic, enabling it to take the top spot in the 5 largest distribution companies in the world. Its US division alone earns more than $3 billion in revenue. The company celebrated its 50th anniversary last year and is by far the market leader in distribution, especially of electronic and B2B products.
See also Top 11 Largest Aerospace Companies in the US and 15 Largest Drilling Companies in the World
Pixabay/Public Domain
Disclosure: No positions. 15 largest distribution companies in the world is originally published on Insider Monkey.
