The Wholesale Trade 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.

Wholesale trade statistics for the conterminous United States have been collected in periodic censuses since 1929, as well as in various surveys from 1937 to the present. Census data for Puerto Rico, Alaska, and Hawaii were added in 1939; for Guam and the Virgin Islands of the United States, in 1958; and for the Commonwealth of the Northern Mariana Islands, in 1982.

The economic census, of which wholesale trade is a part, is now taken every 5 years for years ending in “2” and “7.” Sales and other figures reported refer to business transacted during the stated reference years; the data are collected in the following year. The economic census is authorized by Title 13, United States Code—Census. Response to census inquiries is mandatory. The periodic surveys are taken under the same authority, but response to surveys conducted more frequently than once a year is on a voluntary basis. In all cases, the information supplied is confidential, by law, and is presented in summary form only. The Census Bureau makes certain that no individual firm’s operations can be identified from the figures in the published reports or public-use computer files. There are heavy penalties for violating the confidentiality provisions of the law.

The economic census and surveys usually are conducted by mail. The wholesale trade census data are collected from all firms with paid employees, while survey data generally are obtained from a sample of merchant-wholesaler firms only. The economic census unit of enumeration is the establishment, usually defined as a physical location at which business is conducted, while the unit of enumeration for the monthly and annual surveys is the firm. The principal types of establishments covered are (1) merchant wholesalers, (2) manufacturers’ sales branches and sales offices, and (3) agents and brokers.

The 1997 Economic Census saw the introduction of the North American Industry Classification System (NAICS), which replaced the Standard Industrial Classification (SIC) code used by the Census Bureau since the 1940s. The NAICS assigned classification based on the primary activity of an establishment—determined by the production function of the establishment. Wholesale trade is identified as NAICS sector 42. For example, an establishment primarily engaged in the wholesale distribution of new and used passenger automobiles, trucks, and other motor vehicles, such as motorcycles, motor homes, and snowmobiles, is coded NAICS 421110.

The Census Bureau used the NAICS for the 1997 Economic Census (except for the Outlying Areas, the Commodity Flow Survey, and the Vehicle Inventory and Use Survey). The annual wholesale trade survey implemented the NAICS in its 1999 program, while the monthly program will begin using the NAICS in 2001.

For tabulation purposes, all wholesale establishments are grouped into one of three major categories of operations—

• Merchant wholesalers are establishments that sell goods on their own account. They typically maintain their own warehouse where they receive and handle goods for their customers. Goods generally are sold without transformation, but these establishments may sort, package, label, and provide other marketing services.
• Manufacturers’ sales branches and offices.
• Agents, brokers, and commission merchants. These establishments arrange for the sale or purchase of goods owned by others or purchase goods on a commission basis. They generally operate from offices and do not own or handle the goods they sell.