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How fragmented is the electrical b2b distribution industry?
Hello! Thanks for your question about how fragmented the electrical B2B distribution industry is. The short answer is that 98% of this industry is made up of small businesses, with 80% of the industry comprised of "mom and pop" businesses with fewer than 10 employees. You'll find a deep dive of my research below.
METHODOLOGY
To respond to your request, I used an advanced search of Hoovers for the industry in question, "Electrical Products Wholesalers" in Hoovers' database. For the search, I filtered the results first by the industry, second by the United States, and third by both the company's revenue and number of employees. Through this approach, I was able to get a clear idea of the current fragmentation of the market. All of the data acquired through Hoovers should be current, from 2016 or 2017.
INSIGHTS
The search of Hoovers for companies in the "Electrical Products Wholesalers" industry based on revenue produced the following results for the number of companies in each segment:
Less than $1 million in revenue: 9,725 companies
$1-$5 million: 3,283
$5-$10 million: 948
$10-$50 million: 931
$50-$500 mil: 298
$500 - $1,000 million: 19
$1 - $10 billion: 18
Greater than $10 billion: 2
As you can see, this also tells us the total number of companies in the industry: 14,938. To further understand the fragmentation of the industry, I repeated the search but filtered by the number of employees, rather than by revenue:
Fewer than 4 employees: 8,682 companies
5 - 10: 3,289
11 - 49: 2,344
50 - 99: 332
100 - 499: 216
500 - 999: 38
1,000 - 4,999: 23
More than 5,000: 14
There's a clear picture here, from both sets of search results, of the fragmentation of the industry: the vast majority of businesses are very small, with only a handful of large companies and a few mid-sized companies. To get more specific, we can find out the exact percentage of each business size through a simple calculation, based on the total number of businesses being 14,938. I've categorized the business sizes as follows: "mom and pop" businesses with fewer than 10 employees, small businesses with 11 to 99 employees, medium businesses with 100 to 999 employees, and large businesses with more than 1,000 employees. I got those numbers from Gartner.
"Mom and pop": 11,971 businesses - 80%
Small: 2,676 - 18%
Medium: 254 - 2%
Large: 37 - .002%
As you can see, small businesses make up 98% of the industry. Of those, 80% are "mom and pop" businesses.
CONCLUSION
To wrap up, the electrical wholesale distribution industry is comprised of primarily small businesses, with only a few mid-sized and large companies. I hope this information is helpful to you! Thanks for using Wonder, and let us know if we can help you with anything else.