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Still Growing

February 25, 2013

Consolidated Electrical Distributors (CED) has one of the country’s largest electrical supply distribution networks. It has almost 600 locations in 47 states.  What they distribute is just about anything that keeps your lights on, and the electricity flowing.  This wholesaler sells products like power supplies, ballasts, transformers, wiring, switches, temperature control, lighting, and motors.  Among the vendors are Coleman Cable, GE, Hubbell, Leviton and 3M.

CED was founded in 1957 as The Electrical Corporation of San Francisco. Its primary means of growth has been through the acquisition of a number of distributors. It does business in the U.S. under around 80 names. CED is owned by the Colburn family.

The firm sells to residential, commercial and industrial construction firms. It also sells to manufacturing plants and warehouse facilities.  The company continues to grow because the market is large and also growing.  Based on company figures around 57 percent of all U.S. homes were built before 1980. Total U.S. Housing Starts have averaged almost 1.5 million units annually since 1959. Thus the market is still huge in residential construction.

The commercial construction and maintenance market niche is large as well.  The U.S. metropolitan area has 4.6 billion square feet of existing office space and over 7.8 billion square feet of existing retail space. There are also the 52,000 hotels to consider.

There is also the industrial manufacturing market which has around 12.9 billion square feet of existing industrial/warehouse spaces located all over the U.S.

CED has found itself in a market which is very large; the electrical distribution business is a $75 billion industry in the U.S. and still growing.  The interest in Green Energy has also been an area for business.  This company distributes electrical components that harness energy from the sun and wind. In 2004, $300 billion was invested in the U.S. for energy efficient technologies and infrastructure.

To take advantage of the market the company follows a decentralized structure giving local managers plenty of leeway to handle the local areaq. It also has a profit sharing scheme which is location specific and is unaffected by the performance of other locations.

 

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