MSC Industrial Supply Co. is finding new ways to build on its strength in ecommerce, even as some online business declines.

The metalworking and industrial supplies distributor reported an 8% year-over-year increase in ecommerce sales to $634.0 million for the fiscal third quarter ended June 3, as total net sales grew 10% to $1.05 billion. That put Q3  ecommerce sales slightly down from a year earlier as a percentage of total sales, to 60.1% from 62.0%, as MSC’s public sector sales shifted more to non-ecommerce channels.

Nonetheless, the distributor pushed ahead a new way in the quarter to build ecommerce sales through MSC’s arrangement with MachiningCloud, a machining tools commerce platform that is relying on MSC as its exclusive ecommerce transaction partner. This new channel is expected to show strong growth, MSC president and CEO Erik Gershwind said today during a Q3 earnings call.

Getting closer to engineers influencing procurement

MachiningCloud, which launched in 2020, is an internet software platform for more than 100,000 users involved in the sale of industrial machining tools from more than 50 brands, including Kennametal, 3DLive, Fullteron Tool Co., Ingersoll Cutting Tools and Jergens. It expects to have more than 200 brands by the end of this year, says Matthew Nicholson, MachiningCloud’s director of sales and marketing.

“We strengthened our position for future growth through an exclusive agreement with MachiningCloud,” Gershwind said.

He said the partnership “gets MSC closer to the early stages of the manufacturing process, which expands MSC’s reach to new decision makers, such as engineers and programmers who are key influencers in the procurement process.”

“We’ve always felt like we had a strong ecommerce program, but we also have always felt that you never stand still,” Gershwind added.

He said two pillars of MSC’s ecommerce  growth strategy are ongoing improvements to its ecommerce platform, including enhancements underway to online product discovery on MSCDirect.com. The other pillar is digital partnerships and programs to expand MSC’s reach with new customers, including through MachiningCloud and MillMax, a program that helps customers set up complicated milling operations and reduce manufacturing costs.

For the third quarter ended June 3, MSC also reported:

● Gross profit increased 4.3% to $428.9 million, resulting in a gross margin of 40.7%, down from 42.9% a year earlier.

● Net income fell 4.5% to $95.2 million.

● Sales through internet-connected vending machines grew 10% and accounted for 15% of total sales.

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