As it currently stands, the market for industrial supply is incredibly fragmented. There exists a plethora of companies operating in this space, supplying and distributing everything from hoses and pipes to screws and motors, serving customers big and small. This industry-wide fragmentation leaves this age-old sector extremely vulnerable to disruption.
An analysis of industrial supply reveals that while there are some large players, no company has a dominant share of the market. The Census Bureau reports some five thousand firms operating in this sector, all vying for their slice of $75 billion per annum. In fact,sales figures from 2015 show that the top 50 companies in the industry generate only half of that revenue. There’s also a large number of small suppliers, with nearly a third of businesses in the industry generating annual revenues below $10 million.
Such conditions make the market incredibly ripe for platform disruption in the form of a digital marketplace that facilitates the transactions between all of these industrial suppliers and the buyers of their goods.
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