E-commerce success for MSC Industrial Supply

opi(source) :

Joshua Allsopp, 02 November 2017

Online accounted for around 60% of total sales in MSC Industrial Supply’s Q4.

Online accounted for around 60% of total sales in MSC Industrial Supply’s Q4.

For the three months ended 2 September, the MRO products distributor reported sales of $753.8 million, up 1.2% on last year, while pre-tax profit came in at $98 million, up 0.3%.

The significance of its e-commerce business continues to grow as online sales came to $455.1 million for the quarter, or just over 60% of total sales. The group’s B2B online purchasing platform MSC Direct was reportedly a key driver behind the growth.

Speaking on the earnings call, MSC CEO Erik Gershwind said: “Our website is a very important part of the value proposition.”

He added: “E-commerce sales include all forms of automated selling. Product sales that go through our vendor managed inventory solutions or on vending machines account for slightly less than half of e-commerce sales. Sales to vending customers contributed roughly 430 basis points to growth in the quarter.”

Gershwind also noted that e-commerce had experienced a “remarkable amount of success” in the industry and fears that it would drive down prices were unfounded, instead it helped speed up the procurement process for B2B customers.

For the full year, sales rose 0.8% to $2.89 billion due to an improving trade environment for manufacturing and the contribution from the recent acquisition of tool supplier DECO. Meanwhile, pre-tax profit fell 0.8% to $368 million.

Gershwind concluded: “For the past several years, we have executed our strategic plan in the face of difficult market conditions. As the environment turned in 2017, we began to see the fruits of this work and enjoyed our first year of significant earnings growth since 2012. Looking forward, we expect to continue growing earnings and expanding operating margins, particularly if the early signs of price inflation materialise in 2018.”

Melville (NY), USA

Tags: B2B, e-commerce, facilities management, MRO, MRO Supplies, online, MSC Industrial Supply


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