Computer and OED Market worth $180Bln

The US computer and office equipment distribution industry includes about 10,000 companies with combined annual revenues of $180 billion. Large companies include Ingram Micro, Tech Data, Synnex, Avnet, and Arrow according to Research and Markets latest report on the sector. The industry is concentrated: the top 50 companies account for almost 60 percent of industry revenue.

COMPETITIVE LANDSCAPE

Demand is strongly affected by the level of business activity. The profitability of individual companies depends on merchandising and efficient operations. Large companies have economies of scale in purchasing. Smaller companies can compete effectively by offering specialty products or superior service. The industry is highly automated: annual revenue per employee is about $600,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products include computers, packaged software, copiers, data drives, and printers. Computers account for 25 percent of industry revenue, packaged software for 10 percent, copiers for 10 percent, data drives for 10 percent, and printers for 5 percent. Other products include a large number of peripheral computer devices and supplies, such as networking equipment, scanners, and ink cartridges.

Distributors buy products from equipment manufacturers or importers and resell them to local customers. Distributors are especially important for small manufacturers that can't directly reach end-users. Most distributors operate one or more warehouses, but in some cases merely process orders shipped directly to customers from a manufacturer.