SPPI FOR WHOLESALE TRADE IN ISRAEL

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SPPI FOR WHOLESALE TRADE IN ISRAEL

• Ruth Vizner
• Central bureau of statistics

23rd Voorburg Group meeting
Aguascalientes, Mexico 22-26 September 2008
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Topics

• Output definition
• Market condition
• Classification
• National accounts
• Pricing methods
• Quality adjustment

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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.

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Definition of the service (2)

• Related services
• Transportation
• Warehousing
• Promotions
• Marketing
• Packaging
• Assortment building
• Other services

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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

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Type of wholesalers
Wholesale on a fee or contract basis
Wholesale that take title to the goods
Manufacturers sales and branch offices
Agents and brokers
Wholesale merchants
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Origin and destination of goods
Intermediate buyer Retailer Industrial institu
tional Other merchant
Local manufacturer
Wholesale trade
Final Customer
import
export
International manufacturer
International customer
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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)

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Market Conditions (2)

• Wholesale trade includes domestic as well as
  international wholesale trade
• In 2005
• Import of goods 25 of revenues
• Export of goods only 4 of revenues

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First group to develop

• 512 - 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 animalshides and
  skinsleather 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

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Group 512

• In 2005
• The biggest, 27 of revenue
• US 11,591 million
• Special conditions
• Fluctuations in the prices of goods in global
  markets
• Changes in exchange rates
• Competition
• Mergers and acquisitions
• Globalization and new technologies

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ClassificationISIC Rev 3
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other Classification (ISIC Rev 4)
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other Classification (CPC)
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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).

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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).

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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.

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Margin Price
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Quality adjustment methodology

• Price 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

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Example of service description
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Another example
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THANKS
QUESTIONS?