Compare and Contrast Between Industrial Distributors and Consumer WholesalingEssay Preview: Compare and Contrast Between Industrial Distributors and Consumer WholesalingReport this essayAccording to the slides used for this class in unit 8; an Industrial Distributor is defined as “A company present in the industrial or commercial market space that buys, stocks and sells products manufactured by their suppliers and needed by end-user companies in manufacturing, construction, mining, oil fields and utilities.” Consumer wholesalers do the same kinds of activities, but for the end consumer (you/ me). First there will be an examination of industrial wholesalers and then the consumer wholesalers will be explored. Secondly there will be a comparison of the similarities and their differences.
There many industrial distributors operating today; this report examines just the top ten according to the website industrial distribution. The statistics concerning these companies are quite impressive; including the number of employees and the sales for these companies. Just the top ten of these companies have a combined work force of 206,021, sales amounting to $71.7 billion, and about 11,052 locations worldwide. The top 3 industrial distributors are Rexel in France, Woseley in England, and Würth in Germany. That accounts for about 56% of total sales in the industry and 65% of all employees work for these companies. The other 7 of the top 10 are headquartered in the U.S. and account for the rest of the sales and employment numbers. Surprisingly five of these are all located east of the Mississippi river; the two that are west is Graybar in St. Louis and Wilson Industries in Houston.
Rexel of France has operations in 28 states throughout the U.S. and the Bahamas; although none in Michigan. The company had sales of $16.2 billion and employs 28,688. This companys focus is on electrical lighting and data solutions. Its website seems to have a focus on convincing customers that they should move towards the greening of their lighting solutions. Examples of their offering cover things such as lamps, controls, ventilation, batteries, and financial solutions for their customers. At first glance it would seem that the offerings are mostly for MRO for industrial companies. Rexel appears to be dedicated to professionals and not accustomed to dealing with the end consumer.
Wolsey of England has many locations in the U.S. through its affiliate company Ferguson; which has several locations in Michigan and across the country. The entire firm showed $14.4 billion in sales and employs 47,000. This companys main focus is in the plumbing and heating business. Fergusons website has both accesses for the professional and the home owner.
Würth of Germany has locations in the U.S. and also has a worldwide presence. This companys focus in centered on such products like clamps, caps & plugs, fittings, rivets, proprietary chemical products, hand, power tools and many more. This firm reported sales of $9.5 billion and employs 57,822. Würth seems to be more diverse in products, but by looking at their website it appears only for procurement professionals.
The top U.S. based company is HD Supply of Atlanta; this company was mentioned in our readings for class. According to its website – “HD Supply is a leading wholesale distribution company, providing a broad range of products and services to professional customers in the Infrastructure & Energy, Maintenance, Repair & Improvement and Specialty Construction markets. With a diverse portfolio of market-leading businesses and approximately 770 locations, HD Supply is one of the largest wholesale distributors in North America.” HD had sales of $7.4 billion and employs 17,500. It would appear by examining this companys website that it is geared towards the professional procurement official, but I did find where a person could order online a vast number of different plumbing and electrical products. HD Supply looks as though they can solve any construction related problem from infrastructure and energy (nuclear), to specialty projects (sports stadiums).
The other side of this discussion is Consumer Wholesaling. In this report the focus will be on two U.S. based companies – Costco and Sams Club. If the numbers posted for industrial distributors was impressive; then the data for the consumer wholesalers is stellar.
Costco is based in Issaquah, Washington and has 563 (2009) locations and is the largest such business in the U.S. The company also has locations in “seven other nations including Canada, Mexico, the United Kingdom, Japan, Korea, Taiwan and Australia.” In 2009 the company reported having sales of $71.4 billion; that comparable with all of the top ten Industrial distributors. Costco also employees a comparable number of employees; coming in at 147,000. Costco offers thousands of consumer products that the end user can have access to through a membership with the company. This company offers its physical location to customers and also offers an expansive website for the customer to engage in shopping for their needs anywhere there is internet access. The company also offers financial and health services to its customers. As of 2009 the cost of this membership was $50 for one year of membership. At the companys physical locations you will find a vast variety of products such as “fresh produce, meat, dairy, seafood, fresh baked goods, flowers, clothing, books, computer software, vacuums, home appliances, home electronics, solar panels, jewelry, tires, art, fine wine, hot tubs, furniture and caskets. Many warehouses have tire garages, pharmacies, hearing aid centers, optometrists, photo processors, and gas stations.” This makes a one stop shopping experience for the customer.
The other player in consumer wholesaling being examined is Sams Club. This company is a subsidiary of the retailing giant Wal-Mart headquartered in Bentonville, Arkansas and is the second largest consumer warehouse in the U.S. Wal-Mart operates “602 membership warehouse clubs in 48 U.S. states (Oregon and Vermont are the only states without a Sams Club), as well as the American possession of Puerto Rico and the three foreign countries of Brazil, China and Mexico.” The exact number of employees working at Sams Club could not be found, but according to a report on the website The Consumerist in January 2010; the company was “cutting about 11,200 jobs nationwide in its stores”. This
troubles Wal-Mart because of a lack of training, customer service, and leadership skills. According to Wal-Mart officials, “we only have 1,500 employees that are trained and we need more staff to be trained. Because of the size and efficiency of our operations, we cannot hire new workers very quickly. Our store is only 18% full. We can’t hire people who can’t work hard enough to pay what we are asking for.”„ The store also sells a selection of food products, including ice cream and cakes, which Sams Club stores, according to CFPJ, is the “most expensive food purchase made in the country.”‟ The website claims that Sams Club offers $5,000 for a membership, but CFPJ reported that that is not the retail cost for $3,000.† We have found numerous reports in our history, the “The Best in Store Stores Report” of grocery stores• offering as much as $5,000 or more for a membership. ‣ According to a survey conducted by The American Council, Wal-Mart had the 9th largest retail customer base in the U.S., topping grocery stores in Minnesota, Colorado and New Jersey, ․ The list of retail stores that closed in a day or less.‥ The top 10 largest shopping malls in the nation in the second longest period last year, the survey claims, was in Minneapolis …‧ We all want the right to live and work in Wal-Mart® locations. Sams Club® offers 1,100 retail jobs in the States. we also have to ask this: Where do we draw the line when it comes to jobs that are available only at or with a local supermarket in the U.S.? Most in the USA are not. If you had Wal-Mart jobs, how would you rank them? Where are your choices? Would you prefer Wal-Mart Stores to go in the right direction on the business of food and beverage in the U.S.? Or, where would you choose to go in a future environment? The real answer to all these questions can be found in the number of supermarkets in the America’s Top 15 and the size of the market. Sams Club offers a variety of services, including a wide selection of foods, beverages and specialty goods, plus a local grocery & liquor store. Why? because Sams Club is locally owned, managed, operated and operated.