Career Retail And Wholesale Wholesale Trade Merchant Wholesaler

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Merchant Wholesaler

Significant Points

  • Most workplaces are small, employing fewer than 50 workers.
  • About 7 in 10 work in office and administrative support, sales, or transportation and material-moving occupations.
  • While some jobs require a college degree, a high school education is sufficient for most jobs.
  • Consolidation and new technology should slow employment growth in some occupations, but many new jobs will be created in other occupations.

Nature of the Work

When consumers purchase goods, they usually buy them from a retail establishment, such as a supermarket, department store, gas station, or Internet site. When retail establishments, other businesses, governments, or institutions—such as universities or hospitals—need to purchase goods for their own use—such as equipment, motor vehicles, office supplies, or any other items—or for resale to consumers, ,they normally buy them from wholesale trade establishments.

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, 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.

Wholesale trade firms are essential to the economy. They simplify product, payment, and information flows 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 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 non-durable 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. Establishments 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 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, and 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 establishments, 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, 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, assistance may be needed 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 advise on how to use the equipment most efficiently.

Working Conditions

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, work in wholesale trade is relatively safe. In 2003, there were 4.7 work-related injuries or illnesses per 100 full-time workers, comparable with the rate of 5.0 per 100 for the entire private sector. Not all wholesale trade sectors are equally safe, however. 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, work unusual hours. Produce wholesalers must be on the job before dawn to receive shipments of vegetables and fruits, and they must be ready to begin delivering goods to local grocers in the early morning.


Wholesale trade accounted for about 5.7 million wage and salary jobs in 2004. More than 193,000 workers in the wholesale trade industry were self-employed. About 90 percent of the establishments in the industry are small, employing fewer than 20 workers, and they have about 36 percent of the industry’s jobs (chart 1). Although some large firms employ many workers, wholesale trade is characterized by a large number of relatively small establishments when compared with other industries. Wholesale trade workers are spread throughout the country, have relatively low union membership, and are more likely to work full time than are workers in most other industries.


Although some workers need a college degree, most jobs in wholesale trade can be entered without education beyond high school. New workers usually receive training after they begin work—for example, in operation of inventory management databases, online purchasing systems, or electronic data interchange systems. Technological advances and market forces are rapidly altering this industry. Even workers in small firms need to keep informed about new selling techniques, management methodologies, and information systems. In addition, technological advances affect the skill requirements for occupations across the entire industry—from warehouse workers to truck drivers to managers. As a result, numerous firms devote significant resources to worker training.

Many firms offer on-the-job training. However, as providing training is becoming more costly and complex, the industry is increasingly using third-party training organizations and trade associations to reduce this burden. To increase productivity, many companies make their employees responsible for more than one function and cross-train them by familiarizing them with many aspects of the company.

Wholesale trade has historically offered good advancement opportunities from the least-skilled jobs up through management positions. For example, unskilled workers can start in the warehouse or stock room. After they become familiar with the products and procedures of the firm, workers may be promoted to counter sales or even to inside sales positions. Others may be trained to install, service, and repair the products sold by the firm. Eventually, workers may advance to outside sales positions or to managerial positions. Wholesale trade firms often emphasize promotion from within, especially in the numerous small businesses in the industry. Even in some of the largest firms, it is not uncommon to find top executives who began as part-time warehouse help.

As the wholesale trade industry changes in the coming years, advancement opportunities could become more limited. Increasing use of the Internet and other electronic means of communication, as well as changing sales techniques, are placing increasing demands on managers, so it will become more difficult to promote less educated workers from within the firm. However, consolidation among wholesale trade firms has resulted in larger companies with more advancement opportunities for those with the appropriate skills. Currently, several large firms in this industry have formal management training programs that train college graduates for management positions, and the number of these programs will probably grow. There are also a growing number of industrial distribution programs at universities, providing students with both business and technical training. All workers should expect to periodically take classes and seminars to learn new skills as the industry adapts to new technology and business practices.

In addition to advancement opportunities within a firm, there also are opportunities for self-employment. For example, because brokers match buyers with sellers and never actually own goods, individuals with the proper connections can establish wholesale brokerage businesses with only a small investment—perhaps working out of their home. Moreover, establishing a wholesale distribution business can be easier than establishing many other kinds of businesses. Wholesalers that get exclusive distribution rights to popular items can become profitable quickly; although wholesale distribution firms usually require a substantial investment, obtaining rights to a successful product can be the foundation of a successful new business.

Other Qualifications


Job Outlook

Over the 2004-2014 period, wage and salary employment in wholesale trade is projected to grow by 8 percent, versus 14 percent growth for all industries combined. Consolidation and the spread of new technology are the main reasons for employment to be slower than average. Employment in the industry, however, still depends primarily on overall levels of consumption of goods, which should grow with the economy. Growth will vary, however, depending on the products and sectors of the economy with which individual wholesale trade firms are involved. For example, due to the nation’s aging population, growth is expected to be higher than average for wholesale trade firms that distribute pharmaceuticals and medical devices. Additionally, a large number of job openings will arise as people retire or leave the industry for other reasons.

The trend towards consolidation of wholesale trade firms into fewer and larger companies is likely to remain strong. Globalization and cost pressures are likely to continue to force wholesale distributors to merge with other firms or to acquire smaller firms. As retail firms grow, the demand for large, national wholesale distributors to supply them will increase. The differences between large and small firms will become more pronounced as they compete less for the same customers, and instead emphasize their area of expertise. The resulting consolidation of wholesale trade into fewer, larger firms will reduce demand for some workers, especially office and administrative support workers, as merged companies eliminate redundant staff.

New technologies are constantly changing the shape and scope of the workforce in wholesale trade. The internet, e-commerce, and Electronic Data Interchange (EDI) have allowed wholesalers and their customers to better gather price data, track deliveries, obtain product information, and market products. This technology will increasingly allow customers of wholesale firms to purchase goods and track deliveries electronically, thus limiting the growth of sales and customer service workers, who would normally perform these functions. Further automation of recordkeeping, ordering, and processing will result in slower growth for office and administrative support occupations. Customers frequently order and pay for goods electronically, therefore fewer bookkeeping, accounting, and auditing clerks will be needed as fewer paper transactions are conducted.

New radio frequency identification (RFID) technology has the potential to streamline the inventory and ordering process further and replace the need for manual barcode scans and eliminate most counting and packing errors. As RFID spreads it may lessen demand for administrative workers, particularly order, stock, and shipping, receiving, and traffic clerks. Not all wholesalers will implement this technology though, as it may not be cost effective for some firms, and workers will still be needed to maintain these new systems.

This 21st Century supply chain will create a strong demand for computer specialists in the wholesale trade industry. Those computer specialists with knowledge of information technologies have the best chances for employment. Wholesalers’ presence in e-commerce and the uses of electronic data interchanges (EDI) will require more computer specialists to develop, maintain, and update these systems. Computer specialists will also be needed to install and develop radio frequency identification systems for those firms that adopt it, and to troubleshoot any problems these systems encounter.

With these new technologies making it easier for firms to bypass the wholesaler and order directly from the manufacturer or supplier, wholesale firms are putting greater emphasis on customer service to differentiate themselves from these other suppliers. Thus, wholesale firms are offering more services such as installation, maintenance, assembly, and repair work and creating many jobs for people that perform these functions. Sales workers will also be in demand to more aggressively develop prospective clients, including demonstrating new products, and offering improved customer service to clients.


Nonsupervisory wage and salary workers in wholesale trade averaged $667 a week in 2004, higher than the average of $529 a week for the entire workforce. Earnings varied greatly among specialties in wholesale trade. For example, in the area with the highest earnings—commercial equipment—workers averaged $872 a week; but in the area with the lowest earnings—farm-product raw materials—workers made $469 a week. Earnings in selected occupations in wholesale trade appear in table 2.

Part of the earnings of some workers is based on performance, especially in the case of outside sales workers, who frequently receive commissions on their sales. Although many sales workers receive a base salary in addition to commission, some receive compensation based solely on sales revenue. Performance-based compensation may become more common among other occupations as wholesaling firms attempt to offer more competitive compensation packages.

Like earnings, benefits vary widely from firm to firm. Some small firms offer few benefits. Larger firms may offer common benefits such as life insurance, health insurance, and a pension. Only about 5 percent of workers in the wholesale trade industry were union members or were covered by union contracts in 2004, compared with about 14 percent of the entire workforce.

Related 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 part of the industry. The activities of these wholesale trade firms commonly center on storing, selling, and transporting goods. As a result, the three largest occupational groups in the industry are office and administrative support workers, many of whom work in inventory management; sales and related workers; and workers in transportation and material moving occupations, most of whom are truck drivers and material movers. In 2004, 70 percent of wholesale trade workers were concentrated in these three groups (table 1).

Most office and administrative support workers need to have at least a high school diploma, and some related experience or additional schooling is an asset. As in most industries, many secretaries and administrative assistants; bookkeeping, accounting and auditing clerks; and general office clerks are employed in wholesale trade. Most of the other administrative support workers are needed to control inventory. Shipping, receiving, and traffic clerks check the contents of all shipments, verifying condition, quantity, and sometimes shipping costs. They may use computer terminals or barcode scanners and, in small firms, may pack and unpack goods. Order clerks handle order requests from customers, or from the firm’s regional branch offices in the case of a large, decentralized wholesaler. These workers take and process orders, and route them to the warehouse for packing and shipment. Often, they must be able to answer customer inquiries about products and monitor inventory levels or record sales for the accounting department. Stock clerks and order fillers code or price goods and store them in the appropriate warehouse sections. They also retrieve from stock the appropriate type and quantity of goods ordered by customers. In some cases, they also may perform tasks similar to those performed by shipping and receiving clerks.

Like office and administrative support workers, sales and related workers typically do not need postsecondary training, but many employers seek applicants with prior sales experience. Generally, workers in marketing and sales occupations try to interest customers in purchasing a wholesale firm’s goods and assist them in buying the goods. There are three primary types of sales people in wholesale firms: Inside sales workers, outside sales workers, and sales worker supervisors.

Inside sales workers generally work in sales offices taking sales orders from customers. They are also increasingly performing duties such as problem solving, solicitation of new and existing customers, and handling complaints. Outside sales workers, also called sales representatives or sales engineers, are the most skilled workers and one of the largest occupations in wholesale trade. They travel to places of business—whether manufacturers, retailers, or institutions—to maintain contact with current customers or to attract new ones. They make presentations to buyers and management or may demonstrate items to production supervisors. In the case of complex equipment, sales engineers often need a great deal of highly technical knowledge, often obtained through postsecondary training. As more customers gather information and complete orders through the Internet, outside sales workers are devoting more time to developing prospective clients and offering services to existing clients such as installation, maintenance, and advising on the most efficient use of purchases. Sales representatives and sales engineers also may be known as manufacturers’ representatives or agents in some wholesale trade firms. Sales worker supervisors monitor and coordinate the work of the sales staff and often do outside sales work themselves. Counter clerks wait on customers who come to the firm to make a purchase.

Transportation and material-moving workers move goods around the warehouse, pack and load goods for shipment, and transport goods to buyers. Laborers and freight, stock, and material movers manually move goods to or from storage and help to load delivery trucks. Hand packers and packagers also prepare items for shipment. Industrial truck and tractor operators use forklifts and tractors with trailers to transport goods within the warehouse, to outdoor storage facilities, or to trucks for loading. Truck drivers transport goods between the wholesaler and the purchaser or between distant warehouses. Drivers of medium and heavy trucks need a State Commercial Driver’s License (CDL). Driver/sales workers deliver goods to customers, unload goods, set up retail displays, and take orders for future deliveries. They are responsible for maintaining customer confidence and keeping clients well-stocked. Sometimes these workers visit prospective clients, in hopes of generating new business.

Management and business and financial operations workers direct the operations of wholesale trade firms. General and operations managers and chief executives supervise workers and ensure that operations meet standards and goals set by top management. Managers with ownership interest in smaller firms often also have some sales responsibilities. First-line supervisors oversee warehouse workers—such as clerks, material movers, and truck drivers—and see that standards of efficiency are maintained.

In order to provide manufactured goods to businesses, governments, or institutional customers, merchant wholesalers employ large numbers of wholesale buyers and purchasing managers. Wholesale buyers purchase goods from manufacturers for resale, based on price and what they think customers want. Purchasing managers coordinate the activities of buyers and determine when to purchase what types and quantities of goods.

Many wholesalers do not just sell goods to other businesses; they may also install and service these goods. Installation, maintenance, and repair workers set up, service, and repair these goods. Others maintain vehicles and other equipment. For these jobs, firms usually hire workers with maintenance and repair experience or mechanically inclined individuals who can be trained on the job.

Sources of Additional Information

Information on careers for manufacturers’ representatives and agents is available from:

Manufacturers’ Agents National Association, 1 Spectrum Pointe, Suite 150, Lake Forest, CA 92360. Internet:

Manufacturers’ Representatives Educational Research Foundation, 8329 Cole Street, Arvada, CO 80005 Internet:

Information on many key occupations in wholesale trade may be found in the 2004-05 Occupational Outlook Handbook:

  • Bookkeeping, accounting, and auditing clerks
  • Computer, automated teller, and office-machine repairers
  • Order clerks
  • Purchasing managers, buyers, and purchasing agents
  • Sales engineers
  • Sales representatives, wholesale and manufacturing
  • Shipping, receiving , and traffic clerks
  • Stock clerks and order fillers
  • Truck drivers and driver/sales workers

  • Source: Bureau of Labor Statistics, U.S. Department of Labor, Career Guide to Industries, 2006-07 Edition, Wholesale Trade, on the Internet at (visited July 15, 2006).

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