Last month we published our annual list of the Big 50 distributors, one of the most widely read articles of the year. We got calls and e-mails from smaller distributors asking us to focus on them, since most distributors are still small, family-owned companies.

Our newest survey of the distribution sector, which will be published next month, shows that more than 65 percent of all distributorships are still family-owned independent businesses—many of them with less than $10 million in sales. Despite mergers, acquisitions, recessions and the like, the small distributor remains in business, with the "average" company being in business for 60 years.

So why have small distributors been so successful? That question was partly answered at a luncheon panel discussion in May during the Industrial Supply Assn.'s Conference and Trade Fair in San Antonio. Smaller distributors on the panel said they are more flexible than their larger competitors, can make decisions faster, have less bureaucracy, and offer the technical expertise that buyers need.

Steve Short, president and CEO of Updike Supply in Dayton, Ohio, (who is featured in our cover story on p. 30), a member of the ISA panel discussion, said he reminds customers that when they're talking to him, "they're already talking to corporate."

Short pointed out that smaller distributors more quickly adapt to change and often are more service-oriented than their larger competitors.

Buyers seem to agree. In surveys done by our sister publication, Purchasing magazine, respondents said they prefer to buy from local or regional distributors. However, they also noted that distributors, whether small or large, must provide quality products, be total-cost competitive, and have the ability to provide top-notch services.

Being a large company, whether it's in distribution or any other business, doesn't guarantee success or profitability. Some of the smaller companies we've interviewed over the years have told us they are content with being labeled a "small distributor." One of those distributors said his company had been profitable for three generations because they had provided personalized service that his larger competitors simply couldn't match.

Small distributors, particularly those who have carved out a niche for themselves, are going to be around for some time. Count on it.

jkeough@reedbusiness.com