Tuesday, September 29, 2009

Wholesale Employment Tracks State of Economy

Merchant wholesalers buy large quantities of goods from manufacturers, mining and agricultural establishments, or fellow wholesalers, and resell them in smaller quantities to other manufacturers, wholesalers, retailers, or large consumers. In other words, they act as middlemen. This might seem like an unnecessary link in the chain, but it provides several key advantages:

• Lower prices: Since wholesalers buy large quantities, they pay less and are thus able to pass some of the savings on to their customers.

• Storage and convenience: Many manufacturers don’t have the desire or ability to store either large quantities of production materials or their finished products.

• A large network: A widget maker probably doesn’t want to seek out and individually serve all of its down-line consumers. It would rather deal with just a few distributors, and focus most of its time and energy doing what it does best – cranking out those widgets.

• Added service: Many wholesalers provide services such as labeling, sorting, packaging, marketing, and even financing and technical support for the product.

Oregon’s Wholesale Industry
Oregon’s wholesale industry provides jobs for over 73,000 people, or about 6 percent of the state’s private-sector employment. Wholesalers are located throughout the state, but the majority of jobs (70%) are in the five-county Portland metro area.

Gross state product (GSP) is the measure of a state’s economic output. Oregon’s wholesale trade industry contributed $10.5 billion to our economy’s GSP in 2008. Wholesale trade had the fourth-largest output value and represented 7.5 percent of Oregon’s private-sector GSP.

Employment in wholesale trade trends closely with the overall economy. As with the overall economy, the pace of job losses accelerated dramatically in the latter part of 2008 and into 2009. Currently, wholesale employment has fallen to 2002 levels.

Read the full article, written by Portland's Regional Economist Amy Vander Vliet, for a more in-depth analysis of Oregon's wholesale trade industry.

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