techDaily.info :: E-commerce Shows Gains in Wholesale Distribution

Tuesday, January 06, 2009

E-commerce Shows Gains in Wholesale Distribution

Posted: 1/15/2003

Posted By:	Pembroke Consulting		Contact:	R Ryerson
Phone:	215-523-5700		Email:	rryerson@pembrokeconsulting.com

Recently, the U.S. Census Bureau released its E-Commerce 2000 "E-Stats" report, tracking e-commerce sales for manufacturing, merchant wholesale distribution, retail, and certain service sectors. Census data show rapid adoption of e-business by merchant wholesalers, who accounted for more than one-fifth all e-commerce sales in the economy measured by the Census.

Merchant wholesalers had e-commerce sales of $213 billion in 2000, which is equal to 7.7 percent of total merchant wholesaler sales. Overall, e-commerce sales by wholesalers grew by 17 percent over 1999.

"Savvy wholesalers are using the Internet to communicate more frequently and strategically with suppliers and customers," said Adam J. Fein, Ph.D., president of Pembroke Consulting, Inc. "Contrary to many predictions, e-commerce technologies are strengthening the wholesaler’s position in the supply chain."

According to Pembroke Consulting’s analysis of the data, drug wholesalers had the largest percent of sales via e-commerce at 31 percent, followed by motor vehicles parts and supplies at 19 percent, and professional and commercial equipment and supplies at 13 percent.

These three industries represent 63 percent of total merchant wholesale e-commerce sales. Excluding these three industries, four percent of wholesale distribution sales were via e-commerce.

"The wholesale distribution industry is adopting e-commerce much more quickly than the retail industry, as only 0.9 percent of all retail sales in 2000 were via e-commerce," noted Fein.

"The vast majority of all merchant wholesale e-commerce sales were transacted via Electronic Data Interchange or EDI," explained Fein. "Our recent Facing the Forces of Change trend study forecasts that Internet technologies will eventually replace many of these EDI transactions. To succeed in the future, wholesalers must be equally agile with phone, fax, in-person and e-commerce."

Pembroke Consulting provides strategic management consulting about distribution channels and marketing strategy for manufacturers, distributors and B2B technology companies. Visit www.PembrokeConsulting.com to learn more about the firm.

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