Dollar Values. All dollar values presented are expressed in current dollars (not adjusted to a constant dollar series). Consequently, when comparing estimates to prior years, users also should consider price level changes.

Confidentiality. Title 13 of the United States Code authorizes the Census Bureau to conduc tcensuses and surveys. Section 9 of the same Title requires that any information collected from the public under the authority of Title 13 be maintained as confidential. Section 214 of Title 13 and Sections 3559 and 3571 of Title 18 of the United States Code provide for the imposition of penalties of up to five years in prison and up to $250,000 in fines for wrongful disclosure of confidential census information. In accordance with Title 13, no estimates are published that would disclose the operations of an individual firm.

The Census Bureau’s internal Disclosure Review Board sets the confidentiality rules for all data releases. A checklist approach is used to ensure that all potential risks to the confidentiality of the data are considered and addressed.

Disclosure Limitation. A disclosure of data occurs when an individual can use published statistical information to identify either an individual or firm that has provided information under a pledge of confidentiality. Disclosure limitation is the process used to protect the confidentiality of the survey data provided by an individual or firm. Using disclosure limitation procedures, the Census Bureau modifies or removes the characteristics that put confidential information at risk for disclosure. Although it may appear that a table shows information about a specific individual or business, the Census Bureau has taken steps to disguise or suppress the original data while making sure the results are still useful. The techniques used by the Census Bureau to protect confidentiality in tabulations vary, depending on the type of data.

Unpublished Estimates. Additional statistics, such as dollar volume estimates for some kinds of business not separately shown in this report, are produced as a byproduct of the regularly published statistics. These additional estimates have not been included in this publication because of high sampling variability, poor response, or other factors that may make them potentially misleading. Upon written request, for a nominal fee the Census Bureau will release these estimates for individual use, though not for publication. It should be noted that some unpublished estimates can be derived directly from this report by subtracting published estimates from their respective totals. However, the estimates obtained by such subtraction would be subject to the poor response rates or high sampling variability described previously for unpublished kinds of business.

Individuals who use estimates in this report to create new estimates should cite the Census Bureau as the source of only the original estimates.

Concurrent seasonal adjustment uses all available unadjusted estimates (including the latest preliminary estimates) as input to the X-12 ARIMA program. When unadjustedpreliminaryandfinalestimatesbecomeavailable,allestimatesareusedasinputtotheX-12 ARIMA program and new factors are applied to the preliminary and final estimates (1 month before the preliminary) and to the previous year estimates that correspond to the preliminary month.

Sales. Sales include merchandise sold for cash or credit at wholesale and retail by establishments primarily engaged in merchant wholesale trade; receipts from customers for rental or leasing of equipment, instruments, tools, etc.; receipts for delivery, installation, alteration, maintenance, repair, storage, and other services; and gasoline, liquor, tobacco, and other excise taxes which are paid by the manufacturer and passed along to the wholesaler.

Sales are net after deductions for refunds and allowances for merchandise returned by customers. Sales that are made on an agency basis for others are included as gross sales. Direct shipments on orders from wholesalers are also included in sales. Total sales do not include nonoperating income from such sources as investments, rental or sale of real estate, etc.

Sales exclude sales taxes and excise taxes collected directly from customers and paid directly to a local, State, or Federal tax agency. Also excluded are receipts from customers for carrying or other credit charges.

Inventories. Inventories represent stocks on a non-LIFO basis (firms that valued inventory on a LIFO basis included the values of LIFO reserve in the total inventory levels) of merchandise owned by merchant wholesalers at the end of the month regardless of location except for goods held outside the United States. Goods held on consignment and items not held for sale such as fixtures, equipment, and supplies are not included. Goods held in foreign trade zones in the United States are also included. Methods of valuation may vary according to the accounting practices of the firm.

Inventories/Sales Ratios. The inventories/sales ratios are derived by dividing the dollar value of inventories by the dollar value of sales. No adjustment is made in these ratios for the markup in sales which may vary from trade to trade.

Purchases. Purchases represent the total cost of merchandise acquired for resale during the year, whether or not payment for the merchandise was made during the year. Purchases are net of returns, allowances, and trade and cash discounts but include payments by the wholesaler for freight, insurance, import duties, and credit and other charges. Purchases exclude the cost of containers, wrapping, packaging, and selling supplies. Also excluded are liquor and tobacco tax stamps.

Cost of Goods Sold. Cost of goods sold are not shown in this report but can be derived by subtracting gross margin data from annual sales data. They represent the total cost of merchandise sold for cash or credit at wholesale and retail by establishments primarily engaged in merchant wholesale trade. Cost of goods sold is calculated by adding all purchases of merchandise (net of returns, allowances, and discounts but including charges for freight, insurance, etc.) during the year to the beginning year inventories, then deducting the end-of-year inventories from the total. Firms were instructed to exclude the cost of containers, wrapping, packaging, and selling supplies in the cost of purchases. Purchase of tax stamps and payments of excise taxes often included by tobacco and liquor wholesalers in their purchases were excluded from cost of goods sold.

Gross Margin. Gross margin represents sales less cost of goods sold. Gross margins is equivalent to the cost of all materials (as distinguished from goods to be resold) and services provided in merchant wholesale establishments whether provided by the merchant wholesaling firm itself or purchased by it from others. To the extent that it includes cost of contract work done by others on materials of the merchant wholesale firms, gross margin includes an element of value added by manufacturing.

Gross Margin as a Percent of Sales. Gross margin as a percent of sales is derived by dividing the gross margin by dollar value of sales. No adjustments are made for service revenues that may be included in sales data.

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Source: U.S. Census Bureau
        Service Sector Statistics Division
                
        Last Revised: March 30, 2006

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Page Last Modified: March 30, 2006