The merchandise described in this sector includes the outputs of agriculture, mining, manufacturing, and certain information industries, such as publishing.
The wholesaling process is an intermediate step in the distribution of merchandise. Wholesalers are organized to sell or arrange the purchase or sale of (a) goods for resale (i.e., goods sold to other wholesalers or retailers), (b) capital or durable nonconsumer goods, and (c) raw and intermediate materials and supplies used in production.
When consumers purchase goods, they usually buy them from a retail establishment, such as a supermarket, department store, gas station, or Internet site. When businesses, government agencies, or institutions, such as universities or hospitals, need to purchase goods, they normally buy them from wholesale trade establishments. Retail establishments purchase goods for resale to consumers, but other establishments purchase equipment, motor vehicles, office supplies, or any other items for their own use.
The size and scope of firms in the wholesale trade industry vary greatly. Wholesale trade firms sell any and every type of good. Customers of wholesale trade firms buy goods for use in making other products, as in the case of a bicycle manufacturer that purchases steel tubing, wire cables, and paint. Customers also may purchase items for use in the course of daily operations, as when a corporation buys office furniture, paper clips, or computers. Other customers purchase a wide variety of goods for resale to the public, as does a department store that purchases socks, flatware, or televisions. Wholesalers may offer only a few items for sale, perhaps all made by one manufacturer, or only a narrow range of goods, such as very specialized machine tools. Others may offer thousands of items produced by hundreds of different manufacturers, such as all the supplies necessary to open a new store, including shelving, light fixtures, wallpaper, floor coverings, signs, cash registers, accounting ledgers, and perhaps even some merchandise for resale.
Wholesale trade firms are essential to the economy. They simplify flows of products, payments, and information by acting as intermediaries between the manufacturer and the final customer. They may store goods that neither manufacturers nor retailers can store until consumers require them. In so doing, they fill several roles in the economy. They provide businesses, institutions, and governments a convenient nearby source of goods made by many different manufacturers that allows them to devote minimal time and resources to transactions. For manufacturers, wholesalers provide a national network of a manageable number of distributors of their goods that allow their products to reach a large number of users. In addition, wholesalers help manufacturers by taking on some marketing, new customer sales contact, order processing, customer service, and technical support work manufacturers otherwise would have to perform.
Besides selling and moving goods to their customers, some wholesalers may provide them other services. These include the financing of purchases, customer service and technical support, product marketing services such as advertising and promotion, technical or logistical advice, and installation and repair services. After customers buy equipment, such as cash registers, copiers, computer workstations, or various types of industrial machinery, they may need assistance to integrate the products into the customer’s workplace. Wholesale trade firms often employ workers to visit customers, install or repair equipment, train users, troubleshoot problems, or provide expertise on how to use the equipment most efficiently.
[ Excerpted from Bureau of Labor Statistics, U.S. Department of Labor, Career Guide to Industries, 2008-09 Edition - Wholesale Trade ]