By Geoffrey Marlow, Founder & President, Marlow Advisory Group
Editor’s Note: This article was originally a LinkedIn post by Geoffrey Marlow, reprinted with permission. Special thanks to Geoffrey Marlow.
For years we’ve been told that technology would eventually disintermediate the electrical distributor.
Manufacturers would sell direct.
Contractors would buy online.
Digital marketplaces would eliminate the need for the traditional middleman.
The latest contractor purchasing data makes that prediction worth revisiting.
In the 2024 Profile of the Electrical Contractor, contractors reported purchasing 48% of their electrical material through electrical distributors.
In the new 2026 survey, it’s back to 63%.
Even more interesting, reported direct-from-manufacturer purchasing went from 21% in 2024 to just 5% in 2026.
Two data points don’t establish a permanent trend.
But they do raise a good question:
What if increasing complexity makes the electrical distributor more valuable, not less?
Think about what has accumulated around a purchase order.
👉 Tariffs.
👉 Changing prices.
👉 Availability.
👉 Substitutions.
👉 Lead times.
👉 Incomplete specifications.
👉 Compatibility.
👉 Project schedules.
👉 Technical support.
👉 Returns.
👉 Credit.
👉 Jobsite delivery.
One manufacturer can simplify its own ordering process.
A contractor doesn’t buy from one manufacturer.
The distributor sits in the middle of all of them.
Maybe that’s the part of the distribution model we’ve underestimated.
The warehouse isn’t necessarily the moat.
Absorbing complexity may be.
If that’s right, there is an implication for manufacturers as well.
Every effort to remove cost from distribution should distinguish between margin that merely exists in the channel and margin that pays for work someone else would otherwise have to perform.
Disintermediation sounds compelling when the middleman isn’t adding much value.
The electrical channel may be demonstrating what happens when the middle is doing more work than we realize.
Geoffrey Marlow’s original LinkedIn post can be found here.
Top image courtesy of Marlow Advisory Group.
ABOUT THE AUTHOR:
Geoffrey Marlow brings over 30 years of experience and achievement to the industry, solidifying his reputation as a principled leader and innovative strategist. He has held senior-most executive roles across mid-sized specialty manufacturers, multi-billion-dollar manufacturing enterprises, and as an entrepreneurial start-up manufacturer’s representative within a top 10 construction market. Most notably, Geoff led his start-up representative agency to unprecedented success, growing it into the largest agency in its market within just five years. More information on Marlow Advisory Group can be found here.
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