Why has Grainger remained one of industrial distribution’s most dominant companies, and what can other distributors learn from its playbook?

In the latest MDM Podcast, I welcome back longtime distribution executive and former MDM VP of Analytics John Gunderson for an in-depth discussion of MDM’s recently published Grainger Case Study and the competitive advantages that have made the MRO giant a consistent market outperformer.

Gunderson brings decades of experience working with major industrial, construction and electrical distributors, including Anixter, Wesco, HD Supply, White Cap and EIS. He also authored MDM’s first five case study reports, examining Fastenal, Wesco, Ferguson, Watsco and MSC Industrial Supply.

The conversation follows the three central themes of MDM’s Grainger Case Study: the company’s High-Touch customer solutions model, its expansive assortment and private-label capabilities, and its nearly 30-year digital commerce evolution.

Gunderson explains how Grainger has successfully evolved from its catalog roots into a solutions-focused distributor that helps customers reduce their total MRO operating costs. He also discusses why smaller distributors shouldn’t attempt to compete with Grainger across every product category, but instead focus on specialized services and technical capabilities that can create similar customer value.

The discussion examines Grainger’s substantial private-label penetration — approximately 19% of U.S. stocked product sales within High-Touch Solutions N.A. — and why Gunderson considers the company a best-in-class operator on that front.

“You have to act as a manufacturer,” Gunderson explains, emphasizing the importance of brand development, product positioning and marketing in building a successful private-label program.

Elsewhere, we discuss Grainger’s distinct High-Touch and Endless Assortment business models, the importance of product data and SKU rationalization, and why the company has largely favored organic expansion over distributor acquisitions for the past decade.

The episode closes with practical lessons for distributors of all sizes, particularly around increasing wallet share with existing customers and consistently demonstrating the financial value of their services.

“Never take for granted that they understand the value that they’re delivering,” Gunderson advises. “And the only way to do that is with a scorecard.”

Grainger was the 10th case study report MDM has published since 2024. Find all of them here.

Listen to the full conversation above for our perspective on what makes Grainger’s operating model so difficult to replicate — and which elements of its success other distributors can apply to their own businesses.