NAICS 423710 Quarterly Industry Report
Hardware Merchant Wholesalers
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 423710Sector: Wholesale Trade (42)Updated: Q1 2026
About This Report
This Fair Market Value industry report for NAICS 423710 integrates data from the U.S. Census Bureau[5] economic surveys, Bureau of Labor Statistics[6] employment data, and SBA size standard publications[7]. Our research team tracks hardware retail demand, construction activity, and fastener market dynamics to provide valuation context for hardware wholesale operations. Updated quarterly, each data point is traced to its originating government or institutional source.
Industry Snapshot
Key metrics for the hardware merchant wholesalers industry.
Industry Definition & Overview
Hardware Merchant Wholesalers (NAICS 423710) encompasses establishments primarily engaged in the merchant wholesale distribution of hardware, knives, and handtools. Product categories include fasteners (bolts, nuts, screws, rivets), power handtools (drills, saws, sanders), cutlery, hand tools, locks, hinges, cabinet hardware, builders hardware, and general-purpose hardware items. These distributors purchase from manufacturers and resell to hardware retailers, home centers, industrial supply operations, and contractors.
The hardware wholesale distribution channel bridges specialized manufacturers with a fragmented retail and commercial buyer base. Distributors maintain broad inventories spanning thousands of SKUs across fastener types, tool brands, and hardware categories. According to the U.S. Census Bureau[5], this classification covers general hardware items, with motor vehicle handtools assigned to other codes and machinists' precision tools classified separately.
Hardware cooperatives and buying groups play a significant role in this industry, allowing independent hardware retailers to achieve purchasing scale comparable to large chain operations. Fastener distribution is a high-volume niche requiring precise inventory management across hundreds of size and material combinations. Power tool distribution involves brand-authorized dealer programs, warranty administration, and seasonal promotional support. The rise of e-commerce has added online fulfillment as a distribution channel, though many hardware products still depend on local wholesale delivery for contractor and retail replenishment needs.
What's Included in This Industry
- Fastener wholesale distribution (bolts, nuts, screws, rivets)
- Power handtool wholesale operations (drills, saws, sanders)
- Cutlery and knife wholesale distribution
- Cabinet and builders hardware wholesale operations
- Lock and security hardware wholesale distribution
- Hinge and door hardware wholesale operations
- Hand tool wholesale distribution
- Staple and brad wholesale operations
- General hardware item wholesaling
- Abrasive product wholesale distribution
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Wholesale Trade | 42 |
| Subsector | Merchant Wholesalers, Durable Goods | 423 |
| Industry Group | Hardware, and Plumbing and Heating Equipment and Supplies Merchant Wholesalers | 4237 |
| NAICS Industry | Hardware Merchant Wholesalers | 42371 |
| National Industry | Hardware Merchant Wholesalers | 423710 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 423720 | Plumbing and Heating Equipment and Supplies (Hydronics) Merchant Wholesalers | Plumbing and heating equipment merchant wholesalers distribute plumbing fixtures and hydronic systems rather than the general hardware items covered here |
| 423730 | Warm Air Heating and Air-Conditioning Equipment and Supplies Merchant Wholesalers | Warm air heating and air-conditioning equipment merchant wholesalers distribute HVAC systems through separate specialized distribution channels |
| 423740 | Refrigeration Equipment and Supplies Merchant Wholesalers | Refrigeration equipment merchant wholesalers distribute commercial cooling systems rather than the handtools and fasteners in this classification |
| 332510 | Hardware Manufacturing | Hardware manufacturing produces locks, hinges, and builders hardware that flow through wholesale distribution to retailers and contractors |
| 332710 | Machine Shops | Machine shops produce custom fasteners and hardware components that supplement standard hardware wholesale product lines |
| 332722 | Bolt, Nut, Screw, Rivet, and Washer Manufacturing | Bolt, nut, screw, rivet, and washer manufacturing produces the fasteners that are a core product category in hardware wholesale distribution |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | California | 13.6% | 801 |
| 2 | Texas | 9.7% | 575 |
| 3 | Florida | 7.1% | 419 |
| 4 | Illinois | 6.1% | 360 |
| 5 | New York | 5.1% | 301 |
| 6 | Ohio | 4.5% | 266 |
| 7 | Pennsylvania | 3.7% | 218 |
| 8 | North Carolina | 3.6% | 212 |
| 9 | Georgia | 3.3% | 192 |
| 10 | Michigan | 3.1% | 184 |
% Of Establishments
0%
14%
Source: County Business Patterns, U.S. Census Bureau[3]
SBA Lending Summary
248
Total SBA Loans
$278.6M
Total Loan Volume
$1.1M
Average Loan Size
10 yrs
Average Loan Term
10.05%
Average Interest Rate
2,440
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[4]
Key Insight: The SBA[7] classifies Hardware Merchant Wholesalers under NAICS 423710 with a size standard of 200 employees. Many regional hardware distributors and specialty fastener suppliers operate below this threshold. Qualifying firms can access SBA lending programs[8] for warehouse expansion, inventory financing, delivery fleet investments, and working capital to support the high-SKU inventory requirements of hardware wholesale distribution. Eligible businesses can access SBA 7(a) loans[9] for working capital, equipment, and acquisition financing, while 504 loans[10] support major fixed-asset purchases including real estate and heavy machinery.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | Truist Bank | 8 | $40.0M | $5.0M |
| 1 | Live Oak Banking Company | 8 | $40.0M | $5.0M |
| 1 | Truliant FCU | 8 | $40.0M | $5.0M |
| 4 | Comerica Bank | 24 | $35.1M | $1.5M |
| 5 | Northwest Bank | 16 | $28.5M | $1.8M |
Frequently Asked Questions
Common questions about this industry.
What types of businesses are classified under NAICS 423710?
NAICS 423710 covers merchant wholesalers distributing fasteners, power handtools, cutlery, cabinet hardware, locks, hinges, hand tools, and general hardware items. These include national hardware cooperative distributors, regional tool wholesalers, and specialty fastener distribution companies. Per the U.S. Census Bureau[5], motor vehicle tools and machinists' precision instruments are excluded.
How is NAICS 423710 organized within the classification hierarchy?
This code belongs to Industry Group 4237 (Hardware, and Plumbing and Heating Equipment and Supplies Merchant Wholesalers), Subsector 423 (Merchant Wholesalers, Durable Goods), and Sector 42 (Wholesale Trade). It shares Industry Group 4237 with 423720 (plumbing equipment), 423730 (HVAC equipment), and 423740 (refrigeration equipment).
What is the SBA size standard for NAICS 423710?
The SBA[7] sets the size standard at 200 employees. Businesses below this threshold qualify as small businesses for federal contracting preferences and SBA-backed loan programs.
Which NAICS codes are most closely related to 423710?
Plumbing equipment wholesalers (423720) and HVAC wholesalers (423730) share the same industry group. Hardware manufacturers (332510) and fastener producers (332722) supply products. Per Census Bureau NAICS references[11], the general hardware focus separates this code from the specialized plumbing, heating, and refrigeration equipment codes.
What industries interact most with hardware wholesalers?
Hardware stores (444140) and home centers (444110) are primary retail customers. Construction contractors (238130) purchase fasteners and building hardware. Per Bureau of Labor Statistics[6] data, residential construction activity and home improvement spending drive hardware wholesale distribution demand.
What specific activities are included in NAICS 423710?
Activities include distributing fasteners, power and hand tools, cutlery, cabinet hardware, locks, hinges, builders hardware, abrasives, and general hardware items. Many distributors support retail dealer cooperative programs and authorized tool dealer networks. Per Census Bureau definitions[5], the merchant wholesale function of taking title to hardware products defines this classification.
Can hardware wholesalers access SBA loans?
Yes. Distributors with fewer than 200 employees qualify for SBA loan programs[8] including 7(a) loans for inventory financing and working capital, 504 loans for warehouse facilities, and microloans for delivery vehicles and equipment. High SKU counts across fastener sizes and tool brands require substantial inventory investment.
Where are hardware wholesalers concentrated in the United States?
Distribution operations spread across the country to serve local hardware retail and contractor markets. Regional distribution centers cluster near manufacturing corridors in the Midwest and Southeast. Hardware cooperative distribution centers serve member retailer networks from strategic locations that minimize delivery distances. States with high construction and home improvement activity support larger hardware wholesale operations.
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Census Bureau, Economic Census census.gov
- [3]U.S. Census Bureau, County Business Patterns census.gov
- [4]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [5]U.S. Census Bureau census.gov
- [6]Bureau of Labor Statistics bls.gov
- [7]SBA size standard publications sba.gov
- [8]SBA lending programs sba.gov
- [9]SBA 7(a) loans sba.gov
- [10]504 loans sba.gov
- [11]Census Bureau NAICS references census.gov
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