The move will cost 178 Grainger workers their jobs and the company $38 million in after-tax charges.
"The condition of the financial markets and the economy limited funding opportunities," said Richard L. Keyser, Grainger chairman and CEO. "The Internet continues to be an important part of our growth strategy, led by Grainger.com."
Sales processed through the site are a small fraction of Grainger's total sales but have risen to $267million last year from $3 million in 1997, according to the Chicago Tribune.
"We expect it to achieve profitability this year and are estimating sales in the range of $400 million to $450 million," Grainger spokeswoman Jan Tratnik told the Tribune.