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Distributors and wholesalers: industry overview and trends to watch

What to expect in employment and economic trends and technology

A high-level look at distributors and wholesalers


When discussing organizations in a supply chain, the terms "distributors" and "wholesalers" are often used interchangeably. While distributors and wholesalers are similar in that they both exist in the supply chain between manufacturers and retailers, their roles are significantly different:


  • Distributors work directly with manufacturers and often have exclusive territory through a contract with them. Through this contract, the distributor may sell product to specific wholesalers or retailers.

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    One example is beverage distributors. They work with a bottling plant and have an exclusive territory of retailers. Distributors provide unique value, as they are able to deliver the exact amount of product a retailer wants. Without this partnership, retailers would have to buy in bulk and store that product at their business.1

  • Wholesalers buy product directly from distributors, typically in high volumes. By buying in bulk, wholesalers often receive more favorable pricing and, in turn, are able to pass on savings directly to retailers.

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    One example is building material wholesalers. They purchase lumber, shingles, siding and other materials in bulk and then sell smaller quantities to lumberyards.2

Distributors and wholesalers are covered or fall under the following NAICS codes:


Industry outlook and trends


According to the Bureau of Labor Statistics (BLS) and IBISWorld, there are:


5,936,200

people employed in wholesale trade3

815,185

businesses in wholesale trade4

Additionally, the industry is expected to see $11.15 trillion in revenue in 2020 and has experienced 1.4% annual growth over the past five years.3 Please note that all of these figures may have changed, and are likely to continue changing, due to market swings.

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Organizations are struggling to attract and retain female drivers.

Females make up only 6.6% of commercial motor vehicle drivers.

Insights on major lines of coverage


Exposures, precautions and lines of coverage that may apply to distributors and wholesalers.

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Recommended lines of coverage: general liability, product liability, umbrella/excess liability, business interruption, equipment breakdown, crime, inland marine, property, workers' compensation and commercial auto


1 https://smallbusiness.chron.com/differences-between-wholesalers-distributors-retailers-30836.html

2 https://www.nawla.org/page/value-of-a-wholesaler

3 https://www.bls.gov/iag/tgs/iag42.htm

4 https://www.ibisworld.com/industry-trends/market-research-reports/wholesale-trade/wholesale-trade.html

5 https://www.naw.org/state-of-the-industry

6 https://tt0dl1563d22haik02ol9k9a-wpengine.netdna-ssl.com/wp-content/uploads/2020/01/Wholesale-Distribution-Industry-Data-updated-01.21.2020.pdf

7 https://www.verndale.com/insights/whats-necxt-in-b2b-distribution-5-trends-to-watch-in-2020

8 https://www.a3automate.org/robots-reworking-warehouse-distribution-centers

9 https://www.irmi.com/term/insurance-definitions/dependent-properties-time-element-coverage

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