Definition of the service (1) The resale (without transformation) of goods from manufacturer to a third party: retailers, industrial, commercial, institutional or professional users or other wholesalers, or involves acting as an agent or broker in buying goods for or selling goods to such companies.
Definition of the service (2) Related services Transportation Warehousing Promotions Marketing Packaging Assortment building Other services
Definition of the service (3) Two types of wholesalers: Merchant wholesalers Buy and sell goods on their own account (wholesale merchant or jobbers, industrial distributors, importers, exporters and cooperative buying associations) Agents and brokers Receive a commission or fee
Type of wholesalers Agents and brokersWholesale merchants Wholesale on a fee or contract basis Wholesale that take title to the goods Manufacturers sales and branch offices
Origin and destination of goods Wholesale trade Local manufacturer International manufacturer Intermediate buyer: Retailer Industrial institutional Other merchant Final Customer International customer import export
Market Conditions (1) In 2007 Industry revenue US$ 55 billion 22,733 dealers 17.7 percent of revenue in all industries Market share of big companies ~70% (3.5 percent of dealers with revenues US$ 40+ million accounted ~ 70% of revenue)
Market Conditions (2) Wholesale trade includes domestic as well as international wholesale trade In 2005 Import of goods ~ 25% of revenues Export of goods only ~ 4% of revenues
First group to develop wholesale trade of agriculture raw material, live animals, food, beverage and tobacco Wholesale of agricultural raw materials and live animals includes: grains and seeds; oleaginous fruits; flowers and plants; unmanufactured tobacco; live animals;hides and skins;leather; agricultural material; waste, residues and by-products used for animal feed Wholesale of food, beverages and tobacco includes: fruit and vegetables; dairy products, eggs and egg products; edible oils and fats of animal or vegetable origin; meat and meat products; fishery products; sugar, chocolate and sugar confectionery; bakery products; beverages; coffee, tea, cocoa and spices; tobacco products
Group 512 In 2005 The biggest, ~ 27% of revenue US$ 11,591 million Special conditions Fluctuations in the prices of goods in global markets Changes in exchange rates Competition Mergers and acquisitions Globalization and new technologies
Classification ISIC Rev 3 Wholesale trade51 Wholesale on a fee or contract basis511 Wholesale of agricultural raw materials, live animals, food, beverages and tobacco 512 Wholesale of household goods513 Wholesale of non-agricultural intermediate products, waste and scrap 514 Wholesale of machinery, equipment and supplies515 Other wholesale519
other Classification (ISIC Rev 4) Wholesale trade 46 Wholesale on a fee or contract basis 461 Wholesale of agricultural raw materials and live animals 462 Wholesale of food, beverages and tobacco 463 Wholesale of household goods 464 Wholesale of machinery, equipment and supplies 465 Other specialized wholesale 466 Non-specialized wholesale trade 469
other Classification (CPC) Wholesale trade services, except on a fee or contract basis 611 of agricultural raw materials and live animals6111 of food, beverages and tobacco6112 of textiles, clothing and footwear6113 of household appliances, articles and equipment6114 of miscellaneous consumer goods6115 construction materials and hardware6116 of chemical and pharmaceutical products6117 of machinery, equipment and supplies6118 of other products6119
Classification Detailed information and description of products and services. Distinction between wholesale trade on own account and on a fee or contract basis. Classification according to the function and kind of product (food, household, machinery). Distinction between specialized and non specialized wholesale trade ( in ISIC rev 4 ).
National accounts issues How to measure prices of output for subsidiaries units of a manufacturing enterprise? ( Units that sell manufactured products made by the parent company ). How to estimate export in wholesale trade ? ( export of services / export of goods ).
Pricing methods Gross margin price. The difference between the acquisition price from the supplier and the selling price to the next buyer. There are some cases: (I) the average gross margin per unit for a particular customer class and/or supplier class for all sales within a product group. (II) th e average gross margin per unit for a particular customer class or supplier class for a specific kind of product. (III) t he average gross margin for all customers and/or suppliers for all sales of a particular product. (IV) t he average gross margin for all customer and/or suppliers for all sales of a product group. (V) margin price for an item / transaction.
Quality adjustment methodology Price determining component include Product information - Type of product - Unit of measure - Origin of product - Additional services Transaction information - Type of costumer - Type of supplier - Size of transaction
Example of service description Selling priceBuying pricecomponent Feed wheat product 1 ton bag Unit of measure Israel Wheat millRussian wheat company Supplier/ costumer Russia Country origin 1 containerSize of transaction Warehousing Distribution Additional services
Another example Selling priceBuying pricecomponent Milka milk chocolate package product 100 gr Unit of measure Chain storeKraft company Supplier/ costumer Belgium Country origin 1000 packages Size of transaction Marketing Co-op Promotion Distribution Warehousing Product management Additional services