The process of combining smaller distribution businesses into a more effective, coherent business is accelerating. Consolidation also continues at the supplier level. Absent the appearance of “black swans”, we expect that these trends will continue. Consolidation is disruptive to all of the stakeholders in the channel. Longstanding relationships between distributors and suppliers are altered, trade associations lose members and the purchasing power of buying groups may be reduced.
Distributors, suppliers and other channel members are rethinking their strategies in response to the consolidation movement. Some are finding new opportunities while others are on the defensive.