Since 2015, SiteOne has added almost a billion dollars in revenue from 56 acquisitions. A lot of that has to do with the pace at which the company is making acquisitions each year. The market share differential between SiteOne and the rest of the market has increased since coming public in 2016. SiteOne commands over 15% overall market share, which is 5x the size of the #2 player. Labor is usually the largest cost, which implies product selection, availability and supply chain efficiency are much more important. Typically, landscape supplies only account for 10% of the total cost for maintenance and 25% for large commercial installation jobs. In these cases, SiteOne doesn’t take on the inventory and the products are directly distributed to the customers’ sites. Some of SiteOne’s largest customers even have direct distribution agreements in place, taking advantage of the company’s supplier relationships. This makes sense as the company is better positioned to win national and regional accounts due to its footprint. And for installation projects, customers often require only small quantities of products from many different suppliers for each job, making it necessary to purchase supplies through a distributor like SiteOne.Īs the largest national distributor, SiteOne does skew more towards larger customers. Many customers buy supplies on an as needed basis for maintenance work (especially the smaller ones). SiteOne has over 280k customers in their database, of which 43% are large (>$150k in spending), 33% medium ($25k-$150k) and 24% small sized (<$25k) customers. On the customer side, there are hundreds of thousands of residential and commercial landscape professionals that provide design, installation, repair and maintenance services of outdoor spaces. Branch locations range in size between 5k to 15k square feet and oftentimes have outside storage yards between 10k to 20k square feet if they offer nursery and hardscape products. The company primarily sells its products through its 590 branch locations in over 45 states and 6 Canadian provinces, which are supported by SiteOne’s 4 distribution centers. SiteOne is the leading wholesale distributor of landscape supplies in the U.S. After doing the research, we think the key differences between the two companies are (1) SiteOne’s product lines are more diverse, which should result in lower LT margins than Pool Corp, (2) the supplier base is more fragmented in landscape supplies, (3) and SiteOne is much more acquisitive, resulting in a higher reinvestment rate. Even the company’s management thinks of SiteOne as Pool Corp 15-20 years ago, implying that there is still ample runway for consolidation + growth in the industry. Both are leading B2B distributors of products for outdoor spaces and connect many different suppliers to professional customers. There are many similarities between SiteOne and Pool Corp (you can read our write-up here ).
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