Review of Industrial Organization
12: 809–816, 1997.
1997 Kluwer Academic Publishers. Printed in the Netherlands.
The “Own-Brand Marketer” Debuts in the 1997
ROBERT L. STEINER
3112 Q St. N.W., Washington, D.C. 20007-3027, U.S.A.
Abstract. The 1997 Census of Wholesale Trade has led the way by recognizing and reporting the
activities of a huge, new type of business that has grown explosively over the past 20 years. The Own-
brand marketer (O-BM) performs all the functions traditionally bundled with domestic manufacturing
except that production is typically outsourced offshore. Previously, O-BM sales and margins had been
intermingled with those of several functionally incompatible types of wholesalers, causing serious
misinterpretations and distortions in many domestic and foreign trade-related measures of industry
performance. The 1997 Census will substantially alleviate these problems.
Key words: Own-brand marketer, drop-ship, apparent consumption, related party trade.
Users of Census economic data should be alerted to a milestone event. For the ﬁrst
time in many years a major new type of business operation will make its Census
debut. Forms in the 1997 Census of Wholesale Trade will include a new Type
of Operation – the Own-brand importer and marketer. The Own-brand marketer
(O-BM) performs all the functions traditionally associated with a manufacturer
except that the goods are not produced in the ﬁrm’s U.S. plants. Typically, the
goods are produced complete offshore by an afﬁliated company or an independent
Also for the ﬁrst time, the Census will collect and report for each type of
wholesaler the percentage of sales that are drop-shipped direct to the customer and
do not enter the establishment of the selling ﬁrm. Although present plans are to
publish these data only in a very aggregative form, special tabulations for Standard
Industrial Classiﬁcations and, hopefully, for Commodity Lines will be available to
Why is this important? Over the last 2 decades the O-BM structure has spread
rapidly throughout many American consumer goods industries including apparel,
I am grateful to Morris Morkre, John Trimble and Ralph Watkins for helpful comments on an
earlier draft and to Tim Poynter for additional information on how Own-brand marketers conduct
A longer version of the present article is available on request from the author. It contains a “wish
list” of further changes in Census deﬁnitions and methodologies and also identiﬁes possible problems
arising out of the new North American Industry Classiﬁcation System (NAICS).