Monthly & Annual Wholesale Trade

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Annual Methodology

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Disclosure Statement: 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.

Sampling Frame: Companies, parts of companies (defined by Employer Identification Numbers, or EINs), and single-unit establishments (also defined by EINs) that are located in the United States, have paid employees, and are classified in wholesale trade as defined by the 2002 NAICS. This includes wholesalers that take title to the goods they sell such as jobbers, industrial distributors, exporters, importers, and Manufacturers' Sales Branches and Offices (MSBOs), as well as companies that do not take title of the goods they sell such as agents, merchandise or commodity brokers, commission merchants, and electronic business-to-business markets. The EIN is the identifier employer businesses use to report Social Security payroll withholdings to the Federal government. Read more [PDF] about the AWTS sampling frame.

Sample Design and Size: The sample for AWTS consists of three separate samples: (1) a sample of merchant wholesalers, MSBOs, (2) a sample of MSBOs, and (3) a sample of wholesale electronic markets and agents and brokers. AWTS uses a stratified, one-stage design with primary strata defined by industry (e.g., Motor Vehicle and Motor Vehicle Parts, Furniture and Home Furnishings, Grocery, etc.). There are 59 primary strata: 40 from the merchant wholesale sample, 17 from the MSBOs sample, and 2 from the Agents and Brokers sample. The primary strata are substratified into 4, 7, 10, or 13 annual sales size strata. The largest sales size stratum within each industry stratum consists of companies, all of which are selected with certainty (sampling weight equal to one). The other strata are populated by EINs. Sample sizes are computed to meet multiple coefficient of variation constraints on estimated annual sales and end-of-year inventory totals. Constraints are specified at detailed industry levels and at broad levels up to the total wholesale level. Sampling weights range from 1 to 250. Units are selected independently between strata using simple random sampling without replacement within the size substrata. The sample consists of approximately 2,100 certainty companies and 5,900 EINs. Updates to the sample are made on a quarterly basis to account for new businesses, deaths, and other changes to the universe. Read more [PDF] about how the AWTS sample is stratified,selected, and maintained.

Data Collection: Data are collected by mail, fax, Internet, and telephone. Response is mandatory under the authority of an Act of Congress, Title 13, United States Code, Sections 182, 224, and 225. Firms in the AWTS sample are asked to report their data for the year just ending. Two years of data are requested in the year in which a new sample is introduced.

Data Items Requested: Data items requested include annual sales, e-commerce sales, number of establishments covered by the report, value of inventories, inventory by valuation, inventory outside of the United States, total purchases of products, total operating expenses and the ending date of the report period if the data provided are for a period other than the calendar year.

Nonresponse: Data are imputed for unit nonresponse, item nonresponse, and for reported data that fail edits. Imputed data are based on responses from similar-sized units classified in the same industry. Read more [PDF] about how nonresponse is handled on the AWTS.

Estimation and Sampling Variance: Total estimates are computed as the sum of weighted data (reported or imputed) for all selected sampling units that meet the sample canvass and tabulation criteria. The weight for a given sampling unit is the reciprocal of its probability of selection into the AWTS sample. These estimates are input to a benchmarking procedure, as described below. Variances are estimated using the method of random groups and are used to determine if measured changes are statistically significant. Read more [PDF] about how the AWTS arrives at its estimates and the reliabilty of those estimates.

Benchmarking: Sales estimates from the current sample are adjusted to the 2002 Economic Census by linking these estimates to the published census-adjusted estimates from the prior sample. Prior to adjustment, historical corrections were made to current sample data back to 2004. For a given detailed industry based on the 2002 North American Industry Classification System (NAICS), the linking is performed by multiplying the sample-based sales estimate by a ratio. The numerator and denominator of the ratio are as follows:

• The numerator is the 2004 published census-adjusted sales estimate for the industry from the prior sample.
• The denominator is the 2004 sales estimate for the industry from the current sample.

For merchant wholesalers, excluding MSBOs, the 2006 expenses estimate for a detailed industry from the current sample is adjusted by applying the ratio described above. A method similar to the one for adjusting sales is used to link the end-of-year inventories and purchases estimates for merchant wholesalers, excluding MSBOs. First, the ratio described above is applied to the sample-based estimates for the given detailed industry for 2004 and subsequent years, resulting in adjusted estimates for these years. Then, the published adjusted estimates for 1998 through 2004 from the prior sample are input to the benchmarking program. Using this program, the estimates for 1999 through 2004 are revised in a manner that:

• Uses the published adjusted estimate for 1998 from the prior sample as a constraint, resulting in no revision to the published 1998 estimate.
• Uses the adjusted estimate for 2004 from the current sample as a constraint.
• Minimizes the sum of squared differences between the year-to-year changes of the input and revised estimates for 1999 through 2004.

For MSBOs, the following describes the method used to link the end-of-year inventories and expenses estimates for 2004 and subsequent years from the current sample. First, the ratio described above is applied to the sample-based estimates for the given detailed industry for 2004 and subsequent years, resulting in adjusted estimates for these years. Then, the difference between the 2004 adjusted estimate from the current sample and the 2004 published adjusted estimate from the prior sample is taken into account by applying a second ratio to the published adjusted estimates for 2002 and 2003 from the prior sample. The numerator and denominator of the second ratio are as follows:

• The numerator is the 2004 adjusted estimate for the industry from the current sample.
• The denominator is the 2004 published adjusted estimate for the industry from the prior sample.

Estimates at 2- and 3-digit NAICS levels are computed by summing the adjusted estimates for the appropriate detailed industries comprising the aggregate.

For Wholesale Electronic Markets and Agents and Brokers (NAICS 425), estimates for 2004 and subsequent years are produced directly from the current sample and are not adjusted.

Important Uses of Results: The Bureau of Economic Analysis (BEA) is the primary Federal user of data collected in the AWTS. BEA uses this information to prepare the national income and product accounts, input-output accounts, and gross domestic product.