Riding the M&A Wave: What Independent Hardware Dealers Need to Know

By Brian Bowerfind, president of LBM and Distribution Divisions, ECI Software Solutions, and Chris Fisher, VP of Global E-commerce and VP of Partnerships, ECI Software Solutions  

The hardware, home improvement and building supply industry is evolving rapidly as mergers and acquisitions (M&A) reshape the market. Large corporations and private equity firms are aggressively expanding by acquiring independent dealers. To remain competitive, independent business owners must understand these trends and position themselves strategically.

M&A in the industry is driven by several factors:

• Industry Consolidation: Large companies are acquiring independent dealers to extend their geographic reach and improve efficiencies. Independent retailers must evaluate whether to compete, collaborate or consider acquisition opportunities.
• Technology and Changing Customer Expectations: The rise of ecommerce, digital payment solutions and automated inventory management is changing how businesses operate. 
• B2B Expansion by Consumer Brands: Major consumer brands are targeting business customers by acquiring established independent dealers with strong commercial relationships, allowing them to gain instant market access.

Despite industry consolidation, independent hardware dealers have distinct advantages:

• Personalized Customer Service: Local decision-making, strong customer relationships and personalized service foster loyalty and differentiate independents from corporate chains.
• Specialized Products and Services: Independent dealers cater to niche markets, offering customized solutions that larger competitors may not provide.
• Local Involvement: Many independent dealers have deep local roots, making them trusted suppliers for contractors, builders and homeowners.

For independent dealers considering a sale or partnership, strategic preparation can maximize valuation and facilitate a smooth transition. It should include:

• Maintaining a Competitive Brand: Deliver an omnichannel experience by showcasing products or enabling online orders, ensuring your brand remains top-of-mind and competitive against larger independents and big online retailers, both in-person and online.
• Investing in Technology: Investing in business intelligence and accounts receivable technology allows you to track where you can improve your operations, margins and sales to stay competitive against dealers who are acquired and suddenly have a wealth of resources overnight.  

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Brian Bowerfind is president of LBM and Distribution Divisions at ECI Software Solutions, a global
provider of cloud-based business management software and service. His focus is on identifying and
capitalizing opportunities to accelerate the company’s growth trajectory through M&A, product
innovation, strategic partnerships and organic means.

Chris Fisher is VP of Global E-commerce and VP of Partnership at ECI Software Solutions, a global
provider of cloud-based business management software and service. He’s responsible for overseeing the
software operations for building materials industries across multiple geographies, leveraging his proven
track record in developing and managing B2B SaaS solutions.