The growing prevalence of wholesale bypass has negatively impacted industry operators
New York, NY (PRWEB) March 06, 2015
The Laboratory Supply Wholesaling industry distributes laboratory, scientific and school equipment and supplies. Professional laboratory and scientific equipment account for nearly three-fourths of industry sales, so revenue closely follows the performance of scientific and technical service industries. While demand from such industries rose strongly following the recession, growth has slowed to a moderate pace in recent years. Overall, revenue is anticipated to grow at an annualized rate over the five years to 2015.
According to IBISWorld Industry Analyst Britanny Carter, “The growing prevalence of wholesale bypass, which is when businesses purchase directly from manufacturers, has negatively impacted industry wholesalers that distribute school supplies and other niche products.” Comparatively, wholesale bypass has not significantly affected larger industry players, such as Thermo Fisher Scientific, thanks to their vertical integration. However, industry companies are actively consolidating; by acquiring smaller players with innovative products, companies are able to simultaneously expand their customer base and reduce competition. Consequently, the number of companies operating in the industry has declined slightly over the past five years.
The profit margins of several laboratory distributors have expanded due to consolidation and growing demand; however, price competition from wholesale bypass has limited returns for many others. “Many retailers are purchasing school supplies and other equipment directly from overseas manufacturers, limiting demand for industry players,” says Carter. As a result, the industry's product mix has continued to shift toward laboratory and testing supplies, which comprise the majority of demand.
Returns are expected to grow over the five years to 2020 as the industry continues to consolidate and research and development expenditure increases. During the period, consolidation is anticipated to reduce the number of industry operators. Growing demand from biotechnology and improved research and development budgets are forecast to boost revenue over the period. While demand for educational services is expected to improve, wholesale bypass will hamper revenue from school equipment and supplies and limit industry growth.
For more information, visit IBISWorld’s Laboratory Supply Wholesaling in Canada industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry wholesale laboratory, scientific and school equipment, instruments and supplies. This industry excludes companies that predominantly distribute medical, hospital and dental equipment and supplies.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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