The Top 8 Wholesaling Business Models in Action
Wholesaling involves buying products from suppliers or manufacturers and selling them to business customers like retailers, industrial users or commercial clients. Wholesalers enable product availability and specialized distribution capabilities. This article examines 8 major wholesaling models with real world examples.
Food Service Wholesaling
Food service wholesalers source groceries and supplies for restaurants, hospitals, schools and other institutions. Leading firms like US Foods, Sysco and Gordon Food Service offer broad line distribution of everything from fresh produce to canned goods, baked items, beverages and janitorial supplies. Wholesaling enables efficient, predictable delivery to high volume food service buyers.
Example: Performance Food Group Company
Performance Food Group (PFG) is a major U.S. food service wholesaler with over 150 distribution centers supplying restaurants, schools, retailers and other commercial food establishments. They offer nationwide broad line supply chain capabilities delivering quality products where and when clients need them.
Auto Parts Wholesaling
Auto parts wholesalers distribute aftermarket replacement parts, accessories and tools to service and repair shops, dealers and auto parts stores. The largest players like Genuine Parts Company (NAPA) and Advance Auto Parts carry extensive inventories to serve automotive aftermarket demand efficiently through supply chains tailored to customers needs.
Example: Genuine Parts Company (NAPA)
GPC’s NAPA brand is a leading U.S. auto parts wholesaler with over 6,000 stores and 600+ distribution centers supplying independent auto parts stores and collision repair shops. NAPA has a vast distribution network with advanced inventory control and forecasting capabilities to ensure parts availability for service professionals nationwide.
Pharmaceutical Wholesaling
Pharmaceutical wholesalers manage distribution of prescription drugs from manufacturers to pharmacies, hospitals and health centers. McKesson, Cardinal Health and AmerisourceBergen represent over 90% of the market. Wholesaling enables safe storage, handling and delivery of pharmaceuticals through secure, cold chain distribution networks.
Example: AmerisourceBergen
AmerisourceBergen is one of the largest global pharmaceutical wholesalers distributing brand name and generic drugs from facilities with state-of-the-art automation and climate control. Wholesaling capabilities like inventory monitoring, data analytics and specialty drug distribution help ensure product availability and improve healthcare outcomes.
Office Supply Wholesaling
Office supply wholesalers aggregate stationary, tech devices, furniture, cleaning items and ancillary supplies used by businesses, schools and offices. Staples, Office Depot and W.B Mason are top players providing bulk discounted rates and consolidated ordering/delivery of all the products organizations routinely need.
Example: Essendant
Essendant is a leading national office essentials wholesaler formed from the merger of United Stationers and S.P. Richards. They distribute over 90,000 items including traditional office supplies, janitorial and breakroom items, technology solutions and industrial supplies to resellers and commercial end users.
Electronics Wh0lesaling
Electronics wholesalers efficiently distribute televisions, mobile devices, home appliances, accessories and consumer electronics from major brands to retailers and repair shops. Ingram Micro, Tech Data, D&H Distributing and Synnex dominate regional and global electronics distribution. Wholesaling enables channel efficiencies between manufacturers and stores.
Example: Tech Data
Tech Data ranked 109 on the Fortune 500 distributes products from over 1500 world class tech brands to customers in over 100 countries. Their efficient supply chain capabilities and specialized services provide vital support connecting major computing vendors with a network of over 150,000 resellers worldwide.
Industrial Equipment Wholesaling
Industrial wholesalers supply specialized products like motors, pumps, compressors and parts to enable manufacturing operations and facility maintenance. Leading distributors include Motion Industries, Applied Industrial Technologies and Kaman Industrial Technologies with over 2 million SKUs sourced from thousands of vendors to serve virtually any industrial component need.
Example: Motion Industries
With over 500 locations, Motion Industries has grown into a leading industrial parts and equipment wholesaler supplying maintenance and repair operations across North America. Their distribution capabilities and extensive product breadth Saves customers time and money by ensuring the right parts are available when needed to minimize downtime.
Floral Wholesaling
Floral wholesalers source fresh flowers domestically and overseas to florists, supermarkets, event planners and other commercial buyers. Providing efficient distribution of a highly perishable product, floral wholesalers like Equiflor, Florabundance and Kendall Farms offer overnight nationwide delivery of the freshest bouquets, arrangements and potted plants from growers worldwide.
Example: Equiflor
Equiflor is one of the largest floral wholesalers delivering fresh cut flowers to over 3000 florists and mass market accounts daily. With farms spanning three continents, they provide year round availability of thousands of flower varieties. Equiflor’s cold chain logistics ensures the highest quality blooms are delivered overnight to buyers across North America.
Wholesalers enable product availability, channel efficiencies and specialized distribution capabilities across industries. These examples illustrate the vital intermediary role wholesaling continues to play connecting suppliers, manufacturers and end user businesses.
The Decline of General Merchandise Wholesalers
General merchandise wholesalers distribute a wide array of products to retailers, from household goods to apparel. However, this non-specialized model is declining as retailers increasingly source directly from manufacturers. In the US, general merchandise wholesaler revenue dropped over 17% from 2012-2017 according to IBISWorld data. Similarly, Japan’s general merchandise wholesalers saw profits decline approximately 9% over the last decade reports Trading Economics. General wholesalers lack bargaining power compared to massive retailers. They also incur unnecessary costs by serving as middlemen between manufacturers and store shelves. As their value proposition weakens, general wholesalers will likely see further contractions.
Growth in Wholesale Medical Equipment Distribution
In contrast to general wholesalers, medical equipment distributors are projecting steady growth worldwide. This wholesale segment sells devices like implants, lasers, and MRI machines to hospitals, clinics, and labs. According to Verified Market Research, the global medical equipment distribution market size should reach $317 billion by 2025, expanding over 6% annually. Factors driving this growth include healthcare spending increases, aging populations, and chronic disease. Wholesalers add value through regulatory compliance, technical product support, and maintenance services. By specializing in a complex vertical, medical equipment distributors remain integral to healthcare supply chains.
Food Wholesalers Benefitting from Digital Acceleration
Food wholesalers represent another wholesale segment maintaining relevance through focus and adaptation. Though food wholesaling revenue dipped early in the pandemic, recovery is already underway. As restaurants and hospitality resume operations, demand for ingredients has climbed over 15% this year says IBISWorld. Many food wholesalers accelerated their e-commerce capabilities during COVID-19 to enable contactless purchasing. These digital investments make wholesalers more efficient partners as customer dining rooms reopen. However, food wholesalers cannot be complacent. Ongoing adoption of services like mobile ordering and virtual kitchens will reshape food supply chains long-term.
In summary, overly broad wholesalers struggle to add value in increasingly direct and digital supply chains. However, wholesale market share persists for specialized distributors incorporating value-added services and adapting to industry shifts.
Reference:
https://dx.doi.org/10.2307/1247896
http://unstats.un.org/unsd/cr/registry/regcs.asp?Cl=9&Lg=1&Co=6
