W.W. Grainger (NYSE:GWW) is an MRO parts distributor with a 90 year operating history that has seen a rapid change in its business over the last decade. The company has done well at shifting its business online, but its share price has languished over fears of Amazon’s (NYSE:AMZN) competition. Although Amazon will continue to be a threat, Grainger is well positioned to maintain its client base and continue to grow market share.

The MRO market is highly fragmented, with the top 50 distributors only representing ~30% of the North American market, which is estimated to be $160B. Grainger holds close to 6% of the market, making it a leader in the space. It also holds ~8% of the Canadian market, and has operations in Europe, Japan, and Mexico. The company’s recent acquisition of Cromwell, a UK MRO parts distributor, adds more than 35,000 European customers and a portfolio of over 80,000 products to help grow Grainger’s European footprint.

Like distributors in other spaces, Grainger has a significant client base on both sides of the sale, which insulates the company well from the loss of any one supplier or customer. The company also sells a wide variety of products covering nearly the entire industrial market, which further diversifies the revenue stream.

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