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SPPI FOR WHOLESALE TRADE IN ISRAEL
Ruth ViznerCentral bureau of statistics
23rd Voorburg Group meetingAguascalientes, Mexico
22-26 September 2008
Topics Output definition Market condition Classification National accounts Pricing methods Quality adjustment
Definition of the service (1) The resale (without transformation) of goods
from manufacturer to a third party: retailers, industrial, commercial, institutional or professional users or other wholesalers, or involves acting as an agent or broker in buying goods for or selling goods to such companies.
Definition of the service (2) Related services Transportation Warehousing Promotions Marketing Packaging Assortment building Other services
Definition of the service (3)
Two types of wholesalers: Merchant wholesalers Buy and sell goods on their own account
(wholesale merchant or jobbers, industrial distributors, importers, exporters and cooperative buying associations)
Agents and brokers Receive a commission or fee
Type of wholesalers
Agents and brokers Wholesale merchants
Wholesale on a fee
or contract basis
Wholesale that take title
to the goods
Manufacturer’s sales and branch offices
Origin and destination of goods
Wholesale trade
Local manufacturer
International manufacturer
Intermediate buyer:
RetailerIndustrial
institutionalOther merchant
Final Customer
International customer
import
export
Market Conditions (1)
In 2007 Industry revenue US$ 55 billion 22,733 dealers 17.7 percent of revenue in all industries Market share of big companies ~70% (3.5 percent of dealers with revenues US$ 40+ million
accounted ~ 70% of revenue)
Market Conditions (2)Wholesale trade includes domestic as well as
international wholesale tradeIn 2005 Import of goods ~ 25% of revenues Export of goods only ~ 4% of revenues
First group to develop512 - “wholesale trade of agriculture raw material, live
animals, food, beverage and tobacco”5121 - Wholesale of agricultural raw materials and live animals
includes: grains and seeds; oleaginous fruits; flowers and plants; unmanufactured tobacco; live animals;hides and skins;leather; agricultural material; waste, residues and by-products used for animal feed
5122 - Wholesale of food, beverages and tobacco includes: fruit and vegetables; dairy products, eggs and egg products; edible oils and fats of animal or vegetable origin; meat and meat products; fishery products; sugar, chocolate and sugar confectionery; bakery products; beverages; coffee, tea, cocoa and spices; tobacco products
Group 512
In 2005 The biggest, ~ 27% of revenue US$ 11,591 millionSpecial conditions Fluctuations in the prices of goods in global markets Changes in exchange rates Competition Mergers and acquisitions Globalization and new technologies
ClassificationISIC Rev 3
51Wholesale trade511Wholesale on a fee or contract basis512Wholesale of agricultural raw materials, live
animals, food, beverages and tobacco513Wholesale of household goods
514Wholesale of non-agricultural intermediate products, waste and scrap
515Wholesale of machinery, equipment and supplies
519Other wholesale
other Classification (ISIC Rev 4)
46Wholesale trade461Wholesale on a fee or contract basis462Wholesale of agricultural raw materials and
live animals463Wholesale of food, beverages and tobacco464Wholesale of household goods 465Wholesale of machinery, equipment and
supplies 466Other specialized wholesale 469Non-specialized wholesale trade
other Classification (CPC)
611Wholesale trade services, except on a fee or contract basis
6111of agricultural raw materials and live animals6112of food, beverages and tobacco6113of textiles, clothing and footwear
6114of household appliances, articles and equipment6115of miscellaneous consumer goods
6116construction materials and hardware
6117of chemical and pharmaceutical products6118of machinery, equipment and supplies6119of other products
Classification
Detailed information and description of products and services.
Distinction between wholesale trade on own account and on a fee or contract basis.
Classification according to the function and kind of product (food, household, machinery).
Distinction between specialized and non specialized wholesale trade (in ISIC rev 4).
National accounts issues How to measure prices of output for
subsidiaries units of a manufacturing enterprise? (Units that sell manufactured products made by the parent company ).
How to estimate export in wholesale trade ? (export of services / export of goods).
Pricing methods
Gross margin price. The difference between the acquisition price from the supplier
and the selling price to the next buyer. There are some cases:(I) the average gross margin per unit for a particular customer class
and/or supplier class for all sales within a product group.(II) the average gross margin per unit for a particular customer class or
supplier class for a specific kind of product.(III) the average gross margin for all customers and/or suppliers for all
sales of a particular product.(IV) the average gross margin for all customer and/or suppliers for all
sales of a product group.(V) margin price for an item / transaction.
Margin Price
unitbuyt
unitsellt
unitt
avgbuyt
avgsellt
avgt
buyt
selltt
PPMP
PPMP
PPMP
,,
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Quality adjustment methodologyPrice determining component include Product information - Type of product - Unit of measure - Origin of product - Additional services Transaction information - Type of costumer - Type of supplier - Size of transaction
Example of service descriptioncomponentBuying priceSelling price
productFeed wheatFeed wheat
Unit of measure1 ton bag1 ton bag
Supplier/ costumerRussian wheat company
Israel Wheat mill
Country originRussia Russia
Size of transaction1 container
Additional services WarehousingDistribution
Another examplecomponentBuying priceSelling price
productMilka milk chocolate package
Milka milk chocolate package
Unit of measure100 gr100 gr
Supplier/ costumer
Kraft companyChain store
Country originBelgiumBelgium
Size of transaction
1000 packages
Additional services
MarketingCo-op PromotionDistributionWarehousingProduct management