New data show e-commerce progress with wholesalers

PHILADELPHIA - According to the U.S. Census Bureau's newly published "2001 E-Stats report" e-commerce sales by wholesalers grew at a healthy clip of 13 percent while their overall sales were relatively flat between 2000 and 2001. The "E-stats report" tracks e-commerce sales by wholesalers and other areas of the economy. The new report showed wholesalers accounted for approximately 25 percent of all e-commerce sales transactions tracked by the Census Bureau.

In 2001, wholesalers had e-commerce sales of $272 billion, which equals 10 percent of total sales by merchant wholesalers. Overall, e-commerce sales by wholesalers grew by 13 percent over 2000 sales.

"The rise in e-commerce by wholesalers is clearly one reason many leading technology companies have their sites set upon the small and mid-sized (SMB) business market for growth," said Adam J. Fein, Ph.D., president of Pembroke Consulting. "Over 95 percent of the nation's 300,000 wholesalers are small businesses, making wholesale distribution a logical target for technology companies seeking growth."

According to Pembroke Consulting's data analysis, drug wholesalers had the largest percent of sales via e-commerce at 48 percent, followed by motor vehicles parts and supplies at 23 percent. These two industries represent 53 percent of the total e-commerce sales by wholesalers. Excluding these two industries, 6 percent of wholesale distribution sales were made via e-commerce.

"By comparison, the wholesale distribution industry is adopting e-commerce much more quickly than the retail industry, as only 1.1 percent of all retail sales in 2001 were via e-commerce," noted Fein. "The majority of wholesale e-commerce sales were transacted via legacy Electronic Data Interchange (EDI) systems, reinforcing the value of in-place systems that work."

Pembroke Consulting is a management consulting firm assisting senior executives from market-leading wholesale distribution, manufacturing and B2B technology companies. To learn more about the firm visit www.PembrokeConsulting.com.

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