The Modern Wholesaler: Global Sourcing, Domestic Distribution, and Scale Economies

Sharat Ganapati

American Economic Journal: Microeconomics, 2025, vol. 17, issue 1, 1-40

Abstract: Half of all transactions in the $6 trillion market for manufactured goods in the United States were intermediated by wholesalers in 2012, up from 32 percent in 1992. Seventy percent of this increase is due to the growth of "superstar" firms—the largest 1 percent. Estimates based on detailed administrative data show that the rise of the largest firms was driven by an intuitive linkage between their sourcing of goods from abroad and an expansion of their domestic distribution network to reach more buyers. Both elements require scale economies and lead to increased wholesaler market shares and markups.

JEL-codes: D22 D24 F14 L15 L60 L81 (search for similar items in EconPapers)
Date: 2025
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Related works:
Working Paper: The Modern Wholesaler: Global Sourcing, Domestic Distribution, and Scale Economies (2024)
Working Paper: The Modern Wholesaler: Global Sourcing, Domestic Distribution, and Scale Economies (2018)
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DOI: 10.1257/mic.20210015

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