Tool & Hardware Wholesaling in the US - Industry Market Research Report

Tool & Hardware Wholesaling in the US - Industry Market Research Report

  • May 2020 •
  • 35 pages •
  • Report ID: 171008 •
  • Format: PDF
Bolted in: Strong downstream construction activity is driving industry demand and revenue


Tool & Hardware Wholesaling in the US

The Tool and Hardware Wholesaling industry exhibits a low level of market share concentration. The industry is highly fragmented and no company is expected to hold a market share greater than 5.0%. Top companies in the industry include Fastenal Company, Ace Hardware Corporation, W.W. Grainger Inc. and HD Supply Inc.

Market share concentration remains low

o Several companies have made strategic acquisitions during the five-year period to expand their wholesaling footprint. Nonetheless, market share concentration remains very low, with a high level of industry fragmentation. While there has been some consolidation activity through mergers and acquisitions, the increasing variety of products sold has kept market share concentration low because only a small portion of total sales can be considered relevant to this industry.

Mergers and acquisitions explained

o From 2014 to 2015, Ace Hardware acquired Emery-Waterhouse and Jensen Distribution. The hardware company then expanded their wholesale distribution network after merging the two entities, forming Emery Jensen Distribution.

Price and quality drive internal competition
o Large and small operators compete primarily based on price, which tends to be the primary differentiating factor between operators. Retailers need to be able to procure merchandise at the lowest possible price to maximize their profit, as do direct industrial purchasers of wholesale products. Other competitive factors include geographic location of facilities, exclusive distribution contracts, breadth of product offerings and quality.

Operators in this industry purchase and distribute a range of hardware products, including hand tools, power tools, locks and keys, metal cutlery, fasteners and saw blades. Operators purchase these products in large volumes before distributing them in customized varieties and at competitive prices to retailers, other wholesalers and end use industries. This industry does not distribute nails, disposable plastic cutlery, hand tools for motor vehicles or hand tools for precision equipment.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.

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