9/24/2012 12:04:00 AM
NEWS BRIEFS
Is Amazon Hurting Fastener Distributors?
When Amazon Supply started offering industrial fasteners, the fastener industry took notice. Here was an online retail giant seeing opportunity in industrial markets. How would it impact fastener distributors?
The anecdotal evidence is that Amazon Supply doesn’t seem to be significantly impacting the market, according to a report published by BB&T Capital Markets.
“We still don’t see Amazon as a major risk at this time,” the report states.
BB&T Capital Markets spoke with Sandvik Coromant, a key metalworking supplier to Amazon Supply. The company made clear it was pleased with the growth it is seeing from Amazon, “which is tracking a bit better than expected.”
“On the other hand, Sandvik was clear that Amazon has only one channel – the Internet – and that is why it allies with broader (e.g., Grainger) and more technical (e.g., value-added resellers) distributors as well,” BB&T Capital Markets stated in its report.
Sandvik made clear that it “has no interest” in undermining other business relationships by providing price concessions to Amazon.
Here’s how BB&T Capital Markets summed up the issue:
“We still view Amazon the same way: addressing a narrower and different slice of the market than the Big 3 distributors, and unlikely to have much impact on price. And if we are wrong about all that, it is so distant as to not be currently relevant.”
BB&T Capital Markets co-produces the monthly Fastener Distributor Index. ©2012 GlobalFastenerNews.com
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