Computer and Packaged Software Wholesaling
Business for Sale Industry Economics
2004 - 2021
2021 - 2027
Although demand for computers and software has grown strongly over the past five years, operators in the Computer and Packaged Software Wholesaling industry have struggled with price erosion and direct sales by software publishers.
While private investment in computers and software has increased, the price of computers and peripheral equipment has decreased substantially during the same period.
Industry operators have had to pass these lower costs downstream, which has suppressed profitability.
In 2020, however, the COVID-19 (coronavirus) pandemic increased demand for computers from businesses.
As social-distancing policies spread across the country, businesses adapted by having employees work remotely.
As a result, computer sales increased, bolstering demand for industry products.
Consequently, over the five years to 2021, industry revenue is expected to increase at an annualized 2.6% to $301.6 billion, including 0.2% in 2021.
While demand for computers and related equipment has grown considerably over the five years to 2021, operators in the Computer and Packaged Software Wholesaling industry have endured increasing price competition and a shift by manufacturers toward direct sales models for software.
Although private investment in computers and software has increased, the price of computers and peripheral equipment has decreased substantially during the same period.
Wholesalers have had to pass these lower costs onto their own customers, which has eroded industry profit (measured as earnings before interest and taxes).
The Computer and Packaged Software Wholesaling industry is expected to expand over the five years to 2026.
Although demand for computers and software will remain high, particularly from business customers, changes already underway in the distribution of computers and software will persist, ultimately reducing wholesalers’ role in the supply chain.
Meanwhile, consumers will continue to do more computing on mobile devices and lower-cost laptops.
Many smaller industry operators do not carry these products, and even those that do will be hurt by their falling selling prices.
As a result, over the five years to 2026, industry revenue is projected to rise at an annualized rate of 3.0% to $349.7 billion, coming off a low base caused by the coronavirus pandemic in 2021.
The Computer and Packaged Software Wholesaling industry comprises establishments primarily engaged in wholesaling computers, computer peripheral equipment, loaded computer boards and computer software.
Manufacturers’ sales branches and offices with wholesale functions are included within this industry.