2Wholesale Trade
The wholesale trade (42) sector comprises establishments engaged in wholesaling
merchandise, generally without transformation, and rendering services incidental to
the sale of merchandise. The wholesaling process is an intermediate step in the
distribution of merchandise. Wholesalers are organized to sell or arrange the purchase
or sale of (1) goods for resale (i.e., goods sold to other wholesalers or retailers), (2)
capital or durable nonconsumer goods, and (3) raw and intermediate materials and
supplies used in production. Wholesalers sell merchandise to other businesses and
normally operate from a warehouse or office. BLS (Bureau of Labor Statistics) data
show that wholesale and retail trades make up a large part of the nation’s employment
and business establishments. In the economy as a whole, wholesale trade represents
about 4.4% of all employment and 7.1% of all establishments. BLS estimates show
that wholesale trade employment averaged 5,749,500 during 2005.
The composition of the wholesale trade in the North American Industry Classi-
fication System (NAICS) breakdown is as follows:
Wholesale trade (42)
Merchant wholesaler, durable goods (423000)
Motor vehicle and motor vehicle parts and supplies merchant wholesalers
(423100)
Furniture and home furnishing merchant (423200)
Lumber and other construction materials merchant wholesalers (423300)
Goods and materials are delivered by the wholesaler to the retailer.
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Profes siona l and co mmercia l equipm ent a nd supplies merchant whole-
saler s (423400 )
Meta l and min eral (except petro leum) merc hant wholesal ers (42350 0)
Electr ical and electroni c goods merc hant wholesalers (423600 )
Har dware an d plumbing and heating e quipment and suppl ies merch ant
wholesal ers (423700 )
Machi nery, equipment , and suppl ies merc hant wholesalers (423800 )
Farm and garden machi nery and equipment merc hant wholesale rs
(423820 )
Mis cellaneous durabl e goods merc hant wholesal ers (423900 )
Merch ant wholesal ers, nondura ble goods (424000 )
Pa per and paper product merc hant whol esalers (424100 )
Dru gs and druggi st’ sundries merc hant wholesal ers (424200 )
Appa rel, piece goods, a nd noti ons merc hant wholesalers (424300 )
Gro cery and relate d product wholesal ers (424400 )
Fa rm product raw mat erial mercha nt wholesal ers (424500 )
Che mical and allie d product s merchant wholesal ers (424600 )
Pe troleum and petro leum product s merc hant whol esalers (424700 )
Beer, wine, and distilled alcoholic beverage merchant wholesalers (424800)
Mis cellaneous nondura ble goo ds merc hant whol esalers (424900 )
Who lesale electroni c mark ets and agents and broker s (425000 )
Whole sale elect ronic mark ets and agents and broker s (425100 )
The whol esale secto r is characteri zed by most workplace s being small, employ-
ing few er than 50 workers. Abou t 7 in 10 work in of fice and adminis trative suppor t,
sales, or trans portation and mat erial-m oving occupat ions. Whil e some jobs requi re a
college degree, a high school educat ion is suf ficient for most jobs.
When consumers purchase goods, they usually buy them from a retail estab lish-
ment, such as a supermarke t, depart ment store, gas station, or Internet sit e. When
retail establishments, other businesses, governments, or institutions—such as uni-
versities or hospitals—need to purchase goods for their own use—such as equip-
ment, motor vehicles, office supplies, or any other items—or for resale to consumers,
they norm ally buy them from wholesal e trade estab lishmen ts (Figur e 2 .1).
The size and scope of firms in the wholesale trade industry vary greatly.
Wholesale trade firms sell any and every type of goods. Customers of wholesale
trade firms buy goods for making other products, as in the case of a bicycle
manufacturer who purchases steel tubing, wire cables, and paint. Customers may
also purchase items for daily use, as when a corporation buys office furniture, paper
clips, or computers, or 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 they may offer thousands of items
produced by hundreds of different manufacturers. Some wholesalers sell only a
narrow range of goods, such as very specialized machine tools; while others sell a
broad range of goods, 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.
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Wholesale trade firms are essential to the economy. They simplify product,
payment, and information flows by acting as intermediaries between the manufacturer
and the customer. They store goods that neither manufacturers nor retailers can store
until consumers require them. In so doing, they fulfill several roles in the economy.
They provide businesses with a nearby source of goods made by many different
manufacturers; they provide manufacturers with a manageable number of customers,
while allowing their products to reach a large number of users; and they allow
manufacturers, businesses, institutions, and governments to devote minimal time
and resources to transactions by taking on some sales and marketing functions—
such as customer service, sales contact, order processing, and technical support—that
manufacturers otherwise would have to perform.
There are two main types of wholesalers: merchant wholesalers and wholesale
electronic markets, agents, and brokers. Merchant wholesalers generally take title to
the goods that they sell; in other words, they buy and sell goods on their own
account. They deal in either durable or nondurable goods. Durable goods are new or
used items that generally have a normal life expectancy of 3 years or more.
Establishments in this sector of wholesale trade are engaged in wholesaling goods,
such as motor vehicles, furniture, construction materials, machinery and equipment
(including household appliances), metals and minerals (except petroleum), sporting
goods, toys and hobby goods, recyclable materials, and parts. Nondurable goods are
items that generally have a normal life expectancy of less than 3 years. Establish-
ments in this sector of wholesale trade are engaged in wholesaling goods, such
as paper and paper products, chemicals and chemical products, drugs, textiles
and textile products, apparel, footwear, groceries, farm products, petroleum and
FIGURE 2.1 Wholesalers process and deliver goods utilizing smaller trucks in most
instances.
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petroleum products, alcoholic beverages, books, magazines, newspapers, flowers
and nursery stock, and tobacco products. The merchant wholesale sector also
includes the individual sales offices and sales branches (but not retail stores) of
manufacturing and mining enterprises that are specifically set up to perform the sales
and marketing of their products.
Firms in the wholesale electronic markets, agents, and brokers subsector arrange
for the sale of goods owned by others, generally on a fee or commission basis. They
act on behalf of the buyers and sellers of goods, but generally do not take ownership
of the goods. This sector includes agents and brokers as well as business-to-business
electronic markets that use electronic means, such as the Internet or electronic data
interchange (EDI), to facilitate wholesale trade.
Only firms that sell their wares to businesses, institutions, and governments are
considered part of wholesale trade. As a marketing ploy, many retailers that sell
mostly to the general public present themselves as wholesalers. For example,
wholesale price clubs, factory outlets, and other organizations are retail establish-
ments, even though they sell their goods to the public at wholesale prices.
Besides selling and moving goods to their customers, merchant wholesalers may
provide other services to clients, such as the financing of purchases, customer service
and technical support, marketing services such as advertising and promotion, tech-
nical 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, assistance may be needed to integrate the products into the
customer’s workplace. Wholesale trade firms often employ workers to visit cus-
tomers, install or repair equipment, train users, troubleshoot problems, or advise on
how to use the equipment most efficiently.
Working conditions and physical demands of wholesale trade jobs vary greatly.
Moving stock and heavy equipment can be strenuous, but freight, stock, and material
movers may make use of forklifts in large warehouses. Workers in some automated
warehouses use computer-controlled storage and retrieval systems that further
reduce labor requirements. Employees in refrigerated meat warehouses work in a
cold environment and those in chemical warehouses often wear protective clothing
to avoid harm from toxic chemicals. Outside sales workers are away from the office
for much of the workday and may spend a considerable amount of time traveling.
On the other hand, most management, administrative support, and marketing staff
work in offices.
Overall, working conditions are relatively safe in wholesale trade. In 2003, there
were 4.7 work-related injuries or illnesses per 100 full-time workers, as against 5.0
per 100 for the entire private sector. However, not all wholesale trade sectors are
equally safe. Occupational injury and illness rates were considerably higher than the
national average for wholesale trade workers who dealt with lumber and construction
materials (7.1 per 100 workers); motor vehicle and motor vehicle parts and supplies
(6.2 per 100 workers); groceries (7.5 per 100 workers); and beer, wine, and distilled
beverages (10.9 per 100 workers).
Most workers put in long shifts, particularly during peak times, and others,
such as produce wholesalers who start work before dawn to receive shipments of
vegetables and fruits, work unusual hours.
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2.1 PROFILE OF RETAIL WORKERS’ DEATHS, INJURIES,
AND ILLNESSES
2.1.1 DEATHS
There wer e 204 occupat ional ly related deaths to retail wor kers in 2005. The whole-
sale secto r account ed for 7% of the service indus try deaths (2736). Tab le 2.1 shows
the percent of those dea ths from each major catego ry.
2.1.2 INJURIES
There wer e 178,760 reported injuries for retail wor kers in 2004; this was 21% of the
total injuries (850,93 0) for the service indus try. The distrib utions for the natur e, body
part, source , and exposur e (acciden t type) for the 178,760 injuries a re presen ted in
Tables 2.2, 2.3, 2.4, and 2.5, respec tive ly.
2.1.3 ILLNESSES
In the whol esales secto r, 7100 cases of occupat ional illne ss wer e reported; this is 5%
of the tota l reported illne sses for the service industry. Table 2.6 provides the
breakdown of the illnesses.
2.2 HAZARDS FACED BY WHOLESALE WORKERS
The hazards of working with all types of products and the handling of these products
as well as the assurance that the products are delivered accurately and in good
condition contribute to the hazards faced by wholesale workers.
The hazards covered in this book are the primary ones that affect wholesale
workers in processing and warehousing facilities. In most cases, the most frequent
hazards faced by wholesale workers are as follows:
.Walking and working surfaces
.Electrocutions
.Overexertion
.Material handling=lifting of containers
.Slips, trips, and falls
.Strains=sprains
.Trauma injuries
.Vehicle accidents
.Forklifts
.Power tools
.Office hazards
2.3 OCCUPATIONS
Many occupations are involved in wholesale trade, but not all are represented in
every type of wholesale trade firm. Merchant wholesalers, by far, make up the largest
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