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One industry that appears to be well insulated from the looming recession is the wholesale retail business. Economic analysts have warned of a slumping U.S. economy since the summer. Sagging real estate sales, and a sub-prime lending market in crisis has rattled nerves of investors in all sectors. The good news is that according to the Monthly Wholesale Trade: Sales and Incentives Report by the U.S. Census Bureau, wholesale traders are still enjoying hefty profits over last year's figures.
For December 2007, durable goods sales for merchant wholesalers were over $350 billion dollars. This is slightly down from November figures, by an estimated ).2% to 1.2%. Comparisons to the previous year however show wholesale trade enjoyed between a 9.3% to 11.9% increase in total sales. The nondurable goods side looked even brighter! Over an 18% increase from December of 2006 to December of 2007.
This is significant since all of the latest economic reports indicate consumer spending is down, due to rises in other household expenses, namely gasoline. However, American culture is one of consumption, and a pinch in the wallet at the pump isn't going to stop desires or needs for new items. What is possibly happening is the base of consumers willing to purchase goods wholesale is increasing.
For example, during an economic recessions, the family budget may not have enough money for a brand new washer and dryer. But, a scratched or dented floor model or a customer return for reasons other than lost functionality, is likely to be in the budget. Either way, a true need for a replacement washer or dryer is not going to go away until the economy improves.
Wholesale retailers can capitalize on this opportunity by investing in varied advertising campaigns. With less people able to afford retail prices on high-end appliances or electronics, all they need to know is about the great deals offered at your store. Try stocking some merchandise you may not regularly offer, or highlighting slightly different products in sales fliers. Anything to increase traffic in and out of your shop or on your website. The economy may be slowing, but the shopping bug certainly isn't!
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