Fastenal’s variety competition

Posted on March 6, 2012 by aviyer2010

An article in Bloombergbusinessweek (Feb 27, 2012) describes the greatest growth compan since 1987 as Fastenal, a distributor of fasteners. Fastenal’s 10,261 pages of fasteners provides the greatest variety of fasteners, available at 2,600 outlets.  Does variety provide a distributor with a competitive advantage in small margin, low cost but high variety items ? Given sourcing flexibility, would service be a barrier to entry for other distributors and enable it to charge a premium ?

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About aviyer2010

Dean and H. William Lichtenberger Chair in Management at the School of Management, University at Buffalo, State University of New York.
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1 Response to Fastenal’s variety competition

  1. Kyle Harshbarger (@KyleHarshbarger)'s avatar Kyle Harshbarger (@KyleHarshbarger) says:
    March 8, 2012 at 2:10 pm

    My old job used Fastenal and McMaster-Carr for anything high variety. It is far more than just fasteners, but the main idea is low mean, high variance manufacturing parts.

    Their prices are not very good compared to bulk purchasing, but they win on fast delivery and availability. The more customers they have, the better they can control their inventories because of their bulk purchases.

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