How Do They Make Money?

Fastenal distributes consumables (tools, blades, PPE, welding supplies, etc) to manufacturers through "branches" or "onsite". The number of branches+onsites = "in-market locations" Branches are more or less conventional brick and mortar stores. These are decreasing in number, but becoming more profitable. In the past 10 years, Avg sales per branch per month has doubled from $101k to $207k, but the number of branches has decreased by 39% from 2637 to 1597. Branches may close due to poor profitability, movement or loss of customers, or conversion of customers to onsite. Onsite locations are in their customer's facilities, either a staffed counter or a vending machine or vendor managed inventory. Onsite locations have 6X'd in the past 10 years, but monthly sales per onsite has stayed somewhat flat. Fastenal attributes this partly due to startup costs for a new onsite taking time to generate sales, and they say that sales grow over the age of the onsite (or branch for that matter).