NAICS 423720 Quarterly Industry Report
Plumbing and Heating Equipment and Supplies (Hydronics) Merchant Whole
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 423720Sector: Wholesale Trade (42)Updated: Q1 2026
About This Report
This Fair Market Value industry report for NAICS 423720 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 plumbing fixture demand, water heater shipments, and construction activity to provide valuation context for plumbing wholesale operations. Updated quarterly, each data point is traced to its originating government or institutional source.
Industry Snapshot
Key metrics for the plumbing and heating equipment and supplies (hydronics) merchant whole industry.
Industry Definition & Overview
Plumbing and Heating Equipment and Supplies (Hydronics) Merchant Wholesalers (NAICS 423720) encompasses establishments primarily engaged in the merchant wholesale distribution of plumbing equipment, hydronic heating equipment, household-type water heaters, and related supplies. Product categories include pipes, valves, fittings, plumbing fixtures (sinks, toilets, bathtubs), faucets, water heaters, hydronic boilers, radiators, and plumbing tools and supplies. These distributors purchase from manufacturers and resell to plumbing contractors, mechanical contractors, and plumbing retailers.
The plumbing wholesale distribution channel is branch-intensive, with local inventory and delivery speed driving competitive advantage. Contractors need products on-site quickly to keep job schedules on track, and plumbing wholesalers maintain extensive local inventories to provide same-day or next-day fulfillment. According to the U.S. Census Bureau[5], warm air heating and air-conditioning equipment falls under NAICS 423730, creating a clear boundary with this hydronics-focused code.
Showroom operations represent an important revenue channel for many plumbing wholesalers. Decorative plumbing showrooms display kitchen and bath fixtures to homeowners working with designers and contractors on renovation projects. The specification and selection process for high-end plumbing fixtures creates a consultative sales model quite different from the commodity pipe and fittings counter trade. Both channels operate within the same wholesale distribution businesses, serving different customer segments with different service requirements across residential and commercial plumbing construction markets.
What's Included in This Industry
- Pipe and fittings wholesale distribution (copper, PVC, PEX)
- Plumbing fixture wholesale operations (sinks, toilets, tubs)
- Faucet and valve wholesale distribution
- Water heater wholesale operations
- Hydronic boiler and radiator wholesale distribution
- Plumbing tool and supply wholesale operations
- Decorative plumbing showroom operations
- Backflow prevention device wholesale distribution
- Water treatment equipment wholesale operations
- Drain and sewer cleaning equipment wholesaling
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 | Plumbing and Heating Equipment and Supplies (Hydronics) Merchant Wholesalers | 42372 |
| National Industry | Plumbing and Heating Equipment and Supplies (Hydronics) Merchant Wholesalers | 423720 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 423730 | Warm Air Heating and Air-Conditioning Equipment and Supplies Merchant Wholesalers | Warm air heating and air-conditioning equipment merchant wholesalers distribute HVAC systems rather than the plumbing and hydronic products covered here |
| 423710 | Hardware Merchant Wholesalers | Hardware merchant wholesalers distribute general hardware items through parallel wholesale channels that complement plumbing supply distribution |
| 423740 | Refrigeration Equipment and Supplies Merchant Wholesalers | Refrigeration equipment merchant wholesalers distribute commercial cooling systems rather than the plumbing fixtures and hydronic equipment here |
| 332913 | Plumbing Fixture Fitting and Trim Manufacturing | Plumbing fixture fitting and trim manufacturing produces faucets, valves, and fittings distributed through plumbing wholesale channels to contractors |
| 327110 | Pottery, Ceramics, and Plumbing Fixture Manufacturing | Pottery, ceramics, and plumbing fixture manufacturing produces toilets, sinks, and bathtubs distributed through plumbing wholesale channels |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | California | 10.8% | 730 |
| 2 | Texas | 8.6% | 580 |
| 3 | Florida | 6.1% | 412 |
| 4 | New York | 5.6% | 377 |
| 5 | Pennsylvania | 3.8% | 256 |
| 6 | Ohio | 3.8% | 255 |
| 7 | North Carolina | 3.5% | 234 |
| 8 | Illinois | 3.2% | 216 |
| 9 | Georgia | 2.8% | 191 |
| 10 | Michigan | 2.8% | 191 |
% Of Establishments
0%
11%
Source: County Business Patterns, U.S. Census Bureau[3]
SBA Lending Summary
136
Total SBA Loans
$113.4M
Total Loan Volume
$834K
Average Loan Size
10 yrs
Average Loan Term
9.87%
Average Interest Rate
1,632
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[4]
Key Insight: The SBA[7] classifies Plumbing and Heating Equipment Merchant Wholesalers under NAICS 423720 with a size standard of 200 employees. Many regional and independent plumbing wholesalers operate below this ceiling, though industry consolidation has produced several large national and super-regional distribution companies. Qualifying firms can access SBA lending programs[8] for branch expansion, showroom development, inventory financing, and delivery fleet investments. 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 | Alerus Financial, National Association | 8 | $36.2M | $4.5M |
| 2 | U.S. Bank, National Association | 32 | $29.4M | $917K |
| 3 | The Huntington National Bank | 24 | $20.6M | $858K |
| 4 | Banesco USA | 8 | $14.9M | $1.9M |
| 5 | Northeast Bank | 8 | $3.6M | $450K |
Frequently Asked Questions
Common questions about this industry.
What types of businesses are classified under NAICS 423720?
NAICS 423720 covers merchant wholesalers distributing pipes, valves, fittings, plumbing fixtures, faucets, water heaters, hydronic boilers, and plumbing supplies. These include national plumbing distribution chains, regional independent wholesalers, and specialty showroom operations. Per the U.S. Census Bureau[5], this code covers plumbing and hydronic heating equipment, with warm air HVAC classified under 423730.
How is NAICS 423720 organized within the classification system?
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 423710 (hardware), 423730 (warm air HVAC), and 423740 (refrigeration).
What is the SBA size standard for NAICS 423720?
The SBA[7] sets the size standard at 200 employees. Businesses below this ceiling qualify as small businesses for federal contracting set-asides and SBA-guaranteed financing programs.
Which NAICS codes are most closely related to 423720?
HVAC wholesalers (423730) distribute warm air equipment separately. Hardware wholesalers (423710) share the same industry group. Plumbing contractors (238220) are primary customers. Per Census Bureau NAICS references[11], the plumbing and hydronic focus distinguishes this code from the warm air heating and cooling codes.
What industries interact most with plumbing equipment wholesalers?
Plumbing and HVAC contractors (238220) are the largest customer segment. Plumbing fixture manufacturers (327110) and valve makers (332913) supply products. Per Bureau of Labor Statistics[6] data, residential and commercial construction activity drives plumbing wholesale distribution demand nationwide.
What specific activities are included in NAICS 423720?
Activities include distributing pipes, fittings, valves, plumbing fixtures, faucets, water heaters, boilers, radiators, water treatment equipment, and plumbing supplies. Many distributors operate decorative showrooms and provide specification assistance. Per Census Bureau definitions[5], warm air heating and cooling equipment is excluded and classified under 423730.
Can plumbing equipment 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 branch and showroom facilities, and microloans for delivery vehicles. Pipe and fitting inventory requires substantial warehouse space and capital investment.
Where are plumbing equipment wholesalers concentrated in the United States?
Branch operations spread across all metropolitan areas to serve local plumbing contractor markets. States with high construction activity like Texas, Florida, California, Georgia, and the Carolinas support dense branch networks. National distributor headquarters cluster in major cities, while regional independents maintain strong local market positions through service quality and contractor relationships.
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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