E-Commerce Wholesalers Show Healthy Growth

Thursday May 22nd 2003 by Roy Mark
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According to one expert, the increase in e-commerce by wholesalers is clearly one reason many leading technology companies have their sites set upon the small- and mid-sized business market for growth. But drug and automotive aftermarket wholesalers lead pack according to new Census Bureau stats.

E-commerce sales by wholesalers grew at a healthy 13 percent clip between 2000-2001 while their overall sales were relatively flat, according to the U.S. Census Bureau's newly published 2001 E-Stats Report, which 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. Wholesalers had e-commerce sales of $272 billion, which equals 10 percent of total sales by merchant wholesalers.

"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 business market for growth," said Adam J. Fein, president of Philadelphia-based 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'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, six 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," said Fein. "The majority of wholesale e-commerce sales were transacted via legacy Electronic Data Interchange systems, reinforcing the value of in-place systems that work."

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