Pool Corporation ($POOL): The Magic of Conquering a Fragmented Supply Chain

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Introduction: POOL’s Business Model

PoolCorp (POOL or the Company) is the world’s largest wholesale distributor in the swimming pool industry. It funnels products used in the construction, renovation and maintenance of residential and commercial swimming pools, placing itself at the center of the supply chain.

In order to better understand POOL’s importance within this sector it is relevant to make clear the industry’s structure and the middleman role that the Company plays within it. The swimming pool industry is very fragmented with a large number of both manufactures/suppliers and customers. According to POOL’s last presentation, the Company works with more than 2,200 product suppliers and it serves more than 120,000 customers (most of them “small, family-owned businesses with relatively limited capital resources”).

The beauty of POOL’s business model is that, taking into ac…