WZ G—Wholesale and retail trade

Where G sits

1. G Wholesale and retail trade

Contains 2 narrower codes

• 46 Wholesale trade
• 47 Retail trade

What G includes

• This section covers wholesale and retail trade (i.e., sales without further processing or alteration) of tangible goods of all kinds, as well as the provision of services related to the sale of merchandise. Goods are physical, manufactured objects for which there is demand, in which ownership rights can be established, and whose ownership can be transferred from one entity to another through transactions in markets. This is consistent with the definitions and concepts used in the field of balance of payments, the G20 Task Force on the Digital Economy, the Handbook for Measuring Digital Trade, and so on.
• Wholesale and retail trade are the final stages in the distribution of merchandise. This involves supporting activities (see Introductory Guidance, Chapter xx) that comprise a range of operations (or handlings) commonly associated with trade, without further processing or alteration of the goods. These operations (or handlings) include, for example, Examples include sorting, classifying, and assembling goods; mixing or blending goods (e.g., sand); bottling (with or without prior bottle cleaning); packaging, unpacking, and repacking for distribution into smaller quantities; and storage (including deep-frozen or chilled storage). Provided these activities are not carried out as customary trade operations (or handling), they may be performed as primary, secondary, or auxiliary activities in other sections of the WZ (Wholesale Trade Classification).
• The distinction between Division 46 (Wholesale) and Division 47 (Retail) is based on the type of clientele.
• Wholesale trade encompasses the resale of new and used goods to retailers, businesses (B2B, e.g., industry, corporations, commercial and professional users), or other wholesalers, as well as the brokering of trade transactions or the conclusion of sales on behalf of such clients. Typical wholesale entities are those that take ownership of the goods they trade. These include, for example, companies in the supplier industry, import and export businesses, purchasing cooperatives, and sales branches and offices (but not retail stores) established by manufacturing or mining companies separately from their production facilities to market their products and which do not only process orders for direct deliveries from their operations. Furthermore, commodity and raw material brokers, commission agents, sales representatives, and buyers are also included. If wholesalers do not take ownership of the traded goods, they are classified under group 46.1. If wholesalers assume ownership of the goods, even when acting on behalf of third parties, they are classified in groups 46.2 to 46.9.
• Wholesale activities generally consist of assembling, sorting, and classifying goods in large quantities, unpacking, repacking, and distributing them in smaller quantities (e.g., pharmaceuticals), storing, refrigerating, delivering, and displaying goods, advertising for their customers, and designing labels.
• Retail trade encompasses the resale of new and used goods to private households for personal use or consumption, regardless of the distribution channel, i.e., in retail outlets, department stores, at market stalls, through mail order companies, door-to-door sales, street vending, consumer cooperatives, auction houses, etc. This also includes the sale of goods in showrooms (where the displayed goods can be purchased), in temporary sales outlets (e.g., pop-up stores), and in automated retail stores.
• Most retailers acquire ownership of the goods they sell, but some also act as sales agents for clients and sell either on a consignment or commission basis. Retailers who do not acquire ownership of the goods traded are assigned to group 47.9. Retailers who acquire ownership of the goods, even when acting on behalf of third parties, are classified in groups 47.1 to 47.8.
• The WZ (German Economic Zone) does not differentiate between in-store and online retail at the group and class levels. Most retail activities take place both in physical stores and online (as well as through other distribution channels), and it is difficult to distinguish between the two distribution/sales channels based on the predominant sales method. The respective share of online and in-store sales can fluctuate over time, affecting the stability of the classification. The most important classification criterion for retail in the WZ is based on what is sold, not the sales channel.
• Mail order and internet retail are classified according to the type of goods sold.
• The distinction between wholesale and retail is not based on the quantity of goods sold, as wholesale can be based on units and retail on quantities. Rather, the main difference lies in the type of customer. Wholesale customers are typically other businesses, while retail typically sells to end consumers, i.e., private households. If traders sell to both businesses and end consumers without distinction, and it is practically impossible to differentiate the nature of the majority of their clientele, it is recommended that the selling units be classified as retail.
• The mixing of beverages by the manufacturing unit or a contracting unit is classified as manufacturing (Section C). If this involves operations (or handling) customary in connection with trade, it is considered an auxiliary activity and is classified in Section G.
• Transit trading activities, which consist of buying goods and transporting them from one customs territory to another. Transit trading is a triangular transaction in which transit traders carry out export and import transactions between two or more countries outside their own customs territories. Transit traders take ownership of the goods during transport (unlike intermediary entities, which do not acquire ownership of the goods interposed).
• Intermediary retail trade activities, with and without a distinct focus, see 47.9. - Sale of food and beverages by vending machines or automated sales outlets.

What G excludes

• Electricity trading, see 35.15.0
• Trading in gaseous fuels for the supply of energy by pipeline, see 35.23.0
• Trading in digital goods, streaming and downloading of content on digital platforms (e.g., e-books and audio files), see section J
• Resale of prepaid telephone cards and services, see 61.20.0
• Repair and maintenance of motor vehicles and motorcycles, see Division 95
• Cooperatives; these are classified according to their predominant activity

G in other systems