US Wholesale Sector
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 699,324 merchant wholesalers in the US purchase goods from suppliers and sell a mix of those goods to customers. Major customer segments include manufacturers, other distributors, retailers, exporters, institutions (i.e. schools and hospitals), and service providers (i.e. restaurants and hotels). Wholesalers are also known as wholesale merchants, distributors, jobbers, drop-shippers, or import/export merchants.
Competing with Suppliers
The traditional flow of goods from manufacturer to wholesaler and then to retailer or service provider is beginning to break down.
Expansion Pressure
Rapid growth in e-commerce and consumer demand for faster order fulfillment are putting pressure on wholesalers to set up distribution facilities closer to major customers and carry a wider range of goods.
Industry size & Structure
The wholesale sector is comprised of 699,324 establishments that employ 6.1 million workers and generate $7.8 trillion in annual revenue, according to government sources.
- The wholesale sector represents 6% of the nation's Gross Domestic Product (GDP).
- The sector is fragmented with the 20 largest firms representing just 18.6% of revenue.
- In addition to employer establishments, the wholesale sector has 393,682 owner-operated establishments with no employees. Subsectors with the highest numbers of nonemployer establishments are ecommerce wholesalers, agents and brokers (16.8%), grocery wholesalers (7%); apparel, piece goods, and notions wholesalers (6.5%); machinery, equipment, and supplies wholesalers (4.3%) and motor vehicle (4.2%); these firms typically perform the work and may outsource support functions like marketing and accounting.
- While the wholesale sector shed about 56,000 establishments in 2022, it also added about 56,000 new establishments that year.
- The wholesale sector is forecast to grow its employment base by 2.4% overall in 2021-2031, which is much lower than the national average of 5.3% for all jobs, according to the Bureau of Labor Statistics.
Industry Forecast
US Wholesale Sector Industry Growth
Recent Developments
Jan 20, 2025 - Wholesale Sales Up
- Wholesale sales increased 0.6% in November 2024 to $678 billion compared to a month earlier and rose 2% year over year, according to Census monthly wholesale trade data reported in Modern Distribution Management. Categories showing the highest sales growth in November 2024 year over year included electrical (21.8%), hardware (9.7%), computer equipment (5.7%), machinery (4.7%), professional equipment (4.7%), and automotive (4.6%). Total inventories for merchant wholesalers declined during the same period, down 0.2% from October’s revised reading and up 0.8% year over year.
- Economic activity in the services sector expanded for the sixth consecutive month in December 2024, according to the Services ISM Report on Business. The Services PMI registered 54.1% in December, up 2 percentage points from November. Nine of the 18 services industries reported growth in December, including the Arts, Entertainment & Recreation; Retail Trade; and Wholesale Trade industries. Wholesale Trade was one of the industries that reported increases in business activity, employment, new export orders, and prices for the month. The report also noted that the Wholesale Trade was among industries reporting slower deliveries and decreases in the backlog of orders and inventories in December.
- The Logistics Manager’s Index (LMI) posted a slight decline in December 2024 from November’s reading. The December LMI score was 57.3, compared to 58.4 in November and 58.9 in October, per the report. Any reading above 50 indicates that logistics is expanding. The report noted the slowdown in logistics activity in December was due to the seasonal wind-down inventory levels. The index is expected to increase in January when supply chains begin building inventories after running them down in December. The LMI report is compiled by researchers at five universities and receives support from the Council of Supply Management Professionals. The monthly LMI measures eight components within the logistics sector, including inventory levels and costs, warehousing capacity, utilization and prices, and transportation capacity. Inventory levels fell 6.1% to 50 in December 2024 from November, a decline that is seasonally expected.
- Consumer confidence levels declined in December 2024, falling by 8.1 points from the previous month, according to The Conference Board. The Consumer Confidence Index was 104.7 in December 2024 from 112.8 in November 2024. Dana Peterson, chief economist at The Conference Board, noted that those remaining most confident on a six-month moving average basis confidence were those aged under 35 and those in the income category of over $100,000. Per Peterson, “The recent rebound in consumer confidence was not sustained in December as the Index dropped back to the middle of the range that has prevailed over the past two years.” Purchasing plans for homes decreased while plans to buy new cars and big-ticket items rose in December 2024 on a six-month average basis.
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