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Principia Stat of the Week

Three types of two-step distributors, $38 billion in 2018 revenues.

BY HBSDEALER Staff

There are approximately 200 two-step distributors serving the LBM industry in North America, generating more than $38 billion revenue in 2018. These distributors can be categorized into three types, based on distribution footprint:

  • National: Distribution centers across North America
    To qualify as a “national” distributor, a company has distribution centers spread across North America. National distributors have an average of 32 locations.
  • Regional: Distribution centers across one or more regions
    To qualify as a “regional” distributor, a company has several distribution centers, spread across a large region, typically over three or more states. Regional distributors have an average of six locations.
  • Local: Distribution centers in a single area
    To qualify as a “local” distributor, a company has one or two locations and is typically located in a single CBSA or state. Local distributors have an average of one location.

These distributors have a total of approximately 1,170 distribution locations across the United States. Most distributors are small, privately held companies—52% of two-steppers have just one or two distribution centers. Although representing over half of the two-steppers in North America, these smaller distributors only account for approximately 13% of the total two-step distribution market revenue. Conversely, national distributors represent only 8% of all two-step distributors, but generated nearly half of the total revenue for two-step distribution.

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