There is a rising murmur that can be heard at HVACR industry events regarding the threat online retail sales pose to wholesale distribution, and there is some validity to that growing concern. U.S. online retail sales will surpass $1 trillion by 2027 compared to $445 billion this year, according to a forecast by business advisory firm FTI Consulting Inc. The study also noted online purchases accounted for 12 percent of total U.S. sales and 50 percent of total sales growth in the past year. However, many distributors are taking action now to combat the rising threat.
“Online sales are absolutely a threat to the HVACR distribution industry,” said Dale Norton, vice president and director of sales, Meier Supply Co., Conklin, New York. “However, if you are a value-added distributor with goods and services that make it much more difficult for the online market to penetrate your business, then you can continue to thrive. That being said, the pressures are there from online sales, which will continue to nip away at the edges from all distributors. Your business model will dictate how much of your business will suffer.”