The biggest long-term disruption in the wholesale trade sector, one that will remain even after demand and production rebalance to the new economic realities, will be a shift by both manufacturers and retailers toward greater diversity in their supply chain. Manufacturers are more likely to seek multiple outlets for their products as a hedge against being locked into a single wholesaler to prevent the kind of all or nothing situations seen in the current crisis. Retailers are likely to do the same for the same reasons. They will want to increase the likelihood that they will continue to have product to sell even if there is a general shortage and they can only do that by diversifying their base and/or increasing inventory. The same efficiencies that led farmers and food processors to specialize in particular market niches and single source purchasers to enhance profitability in stable times benefitted wholesalers as well. Loss of those efficiencies will reduce per unit profitability going forward, but open up wholesalers to broader market opportunities that will provide a more robust and flexible operating environment in the face of future shocks from whatever source they may come. While we actually consider such a change good for the industry, it will come with winners and losers. Some wholesalers will be unable to adapt to the more fluid selling and supply environment and the shift in operating margins. Those that can be more nimble will thrive. If, as is certainly possible, another major shock such as a pandemic or other world or nationwide crisis does not appear for a couple of decades or more, the pattern will naturally shift back. However, for the remainder of this decade at least, the more diversified supply and demand patterns are expected to predominate. The wholesale sector has not been a major component of tribal economies historically. However, it was emerging as a growing sector in the past 10 years as large gaming tribes, in particular, used their increased capital, internal product needs and new supply chain expertise to move into wholesaling along with the more traditional retail sector. As newer entrants, tribal wholesale ventures would typically be at risk from an unstable sector and shifting supply and demand patterns. Yet the same drivers that increased wholesaling activity in tribal lands, especially capital access and built in demand, should protect this nascent sector in Indian country. They may also benefit from not having established operating patterns over decades that can be hard to revise. One other aspect of wholesale trade that is both cause for concern and unclear in outcome is international trade relations. Already disrupted by more confrontational approaches to trade negotiations and international relations in general, international trade is under greater pressure as countries naturally look inward to protect their own people and, in some cases, cast blame for political reasons to outside forces rather than internal failures. It remains unclear at present the degree to which this will dampen international trade in the long term, given the amount of investment and employment tied to cross-border trade before the current crisis.
∴ PROGNOSIS
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