Directory of Master Distributors 2021
By Metal Center News Staff
on Jun 4, 2021
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Master distributors—larger or more specialized distributors who sell to other distributors—have always served a useful function in the metals market. But their role has become even more important as the supply chain rethinks its approach to inventory.
Traditionally, master distributors serve as an extension of the mills. Often stocking more expensive specialty alloys, they give smaller distributors an alternative to ordering in mill quantities. Master distributors also help remove redundant and excess inventories from the distribution channel. Using a local master distributor as a quick source for special or out-of-stock items allows service centers to cut the slow-movers from their stock while improving their inventory turns.
Volatile metal prices have made service centers and end-users alike more cautious in their purchasing, reducing inventories to contain costs and match their turnover to demand. It has become routine for them to source small quantities from a nearby peer rather than placing large orders with the mills. As they have come to rely more on each other as sources of supply, larger service centers have become de facto master distributors for smaller service centers in their regions.
Thus the ranks of companies in the annual MCN Directory of Master Distributors continue to grow, now including about 265 companies that consider themselves either full- or part-time master distributors. Some actively market their products and services to other distributors, while others take a more passive approach, filling orders from other distributors, even rivals, as they would any customer’s order.
Master distribution has grown from primarily specialty alloys such as stainless or tool steels to encompass almost all products. MCN data indicates that roughly 67 percent of master distributors in this directory offer carbon steel, 48 percent carbon alloys, 64 percent stainless steel, 41 percent aluminum, 36 percent galvanized/coated products, 26 percent copper and brass, 16 percent titanium, and 14 percent tool steel.
Experts say it is unlikely companies will ever carry as much inventory as they did in the past. Thus master distribution is likely to become an even more essential function of a leaner supply chain. Tradionally, roughly 20 percent of the sales volume in metals distribution has involved transactions among distributors. Thus one of the largest customer groups for service centers continues to be other service centers.