Industrial Distribution
Functioning as the "hardware store for factories," this industry stocks and delivers maintenance, repair, and operations (MRO) supplies to commercial clients.
Why it exists
Industrial distributors bridge manufacturers and customers by stocking, sourcing, and delivering equipment, tools, and supplies at scale.
Why it’s necessary
Manufacturers cannot maintain thousands of customer relationships, and buyers cannot efficiently source thousands of SKUs without specialized intermediaries.
Key components
Warehousing & logistics
Vendor contract management
SKU aggregation
Value-added services
How to evaluate businesses
Inventory turns, margin stability, customer retention, breadth of product lines, and digital ordering capabilities drive growth. Scale advantages are enormous; small players often cannot compete on cost.
How the industry could be improved
Automation, AI-based procurement, predictive stocking, real-time pricing, and integration with customer ERP systems could increase efficiency and reduce working capital needs.