investors2026-03-09 - 8 min

One Architecture, Every Buying Group: How PES Scales Across $2.1 Trillion

The neutral intelligence proxy layer is not a single-vertical solution. It is a replicable architecture deployable across every organized buying group in wholesale distribution.

The neutral intelligence proxy layer is not a single-vertical solution. It is a replicable architecture deployable across every organized buying group in wholesale distribution.

Why the Buying Group Consolidation Trend Validates the PES Thesis

AD's 2024 merger with IMARK Electrical consolidated the independent electrical channel into a single buying group entity. AD's January 2026 merger with The Commonwealth Group continues that consolidation. The result: 1,400+ member distributors, 9,000+ branches, $100 billion in annual sales, nine industries, and three countries — all under one buying group umbrella.

This consolidation is not coincidental. Buying groups are actively strengthening their collective economics in anticipation of AI procurement disruption. The distributors running these groups understand that fragmented independent members are more vulnerable to open-market AI routing than a well-organized collective. Consolidation is the buying group's structural response to the same threat that IVAN is designed to solve technically.

The thesis: buying groups and IVAN are aligned on the same outcome. The buying group wants its members' volume to stay inside the network. IVAN is the mechanism that makes that happen — and the intelligence layer that grows it.

A Single Buying Group Endorsement Spans Nine Industries

A buying group endorsement at the AD level would give IVAN access to nine distribution verticals simultaneously:

Electrical — the initial deployment vertical
HVAC
Plumbing
Industrial MRO
Safety
Bearings and Power Transmission
Decorative Brands
Gypsum Supply
Pipe, Valves and Fittings

Each vertical operates as an independently walled network within the broader endorsement structure. Members in electrical do not see member data in HVAC. Each vertical's members receive their own network economics while operating on the same underlying proxy network infrastructure.

This matters for the scaling argument: PES does not sell nine separate products to nine separate vertical markets. It sells one integration at the buying-group level and the architecture propagates across every vertical that group serves.

The Architecture Replicates Across Every Buying Group

Beyond AD, the same model deploys independently to every organized buying group in wholesale distribution. Each gets their own walled IVAN network. Each is independent. Member data does not cross buying group boundaries. Each buying group's proprietary economics — its rebate tiers, manufacturer agreements, aggregated volumes — stay inside their own network.

For investors, the replication model means total addressable market is not just AD's $100 billion. The $2.1 trillion wholesale distribution TAM breaks down across verticals that each have buying group structures — each one a deployable IVAN network.

PES's authoritative Phase 1 TAM concentrations:

| Vertical | U.S. Market | |---|---| | Electrical | $259B | | Plumbing | $136.8B | | HVAC | $105.9B | | Solar | $69.2B | | Industrial MRO | $280B | | Food Service | $350B | | Building Materials | $250B | | Automotive Aftermarket | $400B |

We filed for provisional patent in early 2026 and have 49 patent claims. The architecture is vertical-agnostic. The architecture that protects electrical distributor economics applies identically to food service distributor economics. The buying group is the distribution mechanism. The industry is a parameter, not a redesign.

Three Revenue Streams and the Network Effect

Stream 1: Transaction Fees A percentage of every order processed through the PES checkout proxy. This scales directly with the number of buying group networks on the proxy network and the volume of transactions those networks process. At AD's $100 billion in member sales, even a fraction of transactions flowing through the closed network produces significant transaction fee revenue. Across the full $2.1 trillion TAM, the ceiling is structural.

The ERP partnership multiplies this: PES shares up to 15% of its transaction fee with ERP partners who bundle IVAN. Epicor's 4,700 distribution customers represent transaction volume PES could capture through a single partnership agreement — without selling to each distributor individually.

Stream 2: Intelligence Subscriptions Tiered distributor subscriptions for demand analytics and autonomous agent demand signals, beginning Q1 2027. Recurring revenue independent of any specific transaction. A distributor who processes no orders through IVAN in a given month still pays for the intelligence subscription — real-time visibility into what autonomous agents are searching for in the open market. The subscription is valuable whether the distributor is defending existing volume or capturing new agent-driven business.

Stream 3: IVAN Contractor Subscriptions Contractors access member-only intelligence — real pricing, real availability, real delivery commitments from the right branch — unavailable from any open-market agent or public catalog. Tiered subscription plans include a free trial period. The contractor subscription base compounds with each new member distributor who joins and invites their own customers.

The Network Effect

More members → better matching accuracy → higher contractor adoption → more transactions → richer demand intelligence → higher subscription value → more attractive economics for new members → more members.

Each participant increases the value of the network for every other participant. Each walled buying group network has its own network effect. Adding a new buying group adds a new network effect on infrastructure already built.

The LOI Validation

Multiple signed Letters of Intent are in place, including Werner Electric and Krannich Solar — representing immediate distributor network validation across electrical and solar verticals. These are structured commitments to IVAN network participation from distributors who have evaluated the business case and signed. The LOI base represents deployable proof of the model before full proxy network launch — the kind of early commercial validation that de-risks the investment thesis at the seed stage.

The Scaling Summary

PES does not need to win every vertical simultaneously. A buying group endorsement at the AD level alone — across nine industries, 1,400+ members, and $100 billion in collective volume — is the proof-of-architecture deployment. Every buying group that follows is incremental network revenue on infrastructure already built.

Manus built $100M+ ARR orchestrating AI agent execution in the horizontal market. Meta acquired Manus in December 2025 for $2 billion — a deal China's NDRC subsequently ordered unwound in April 2026. The commercial validation of the thesis stands independent of the acquisition outcome. PES is building the vertical-specific orchestration layer for a market that is orders of magnitude larger than the horizontal agent market Manus served — and protecting it with a patent-pending architecture Manus did not have.

IVAN — the neutral intelligence proxy layer for B2B agentic commerce.

Investor inquiries: investors@proenergysupply.com | proenergysupply.com