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Cash and carry



Cash and carry wholesale represents a type of operation within the wholesale sector. Its main features are summarized best by the following definitions:


 


* Cash and carry is a form of trade in which goods are sold from a wholesale warehouse operated either on a self-service basis, or on the basis of samples (with the customer selecting from specimen articles using a manual or computerized ordering system but not serving himself) or a combination of the two. Customers (retailers, professional users, caterers, institutional buyers, etc.) settle the invoice on the spot and in cash, and carry the goods away themselves. (Eurostat, the European statistics authority).


 


* Though wholesalers buy primarily from manufacturers and sell mostly to retailers, industrial users and other wholesalers, they also perform many value added functions, including selling and promoting, buying and assortment building, bulk-breaking, warehousing, transporting, financing, risk-bearing, supplying market information, and providing management services. (OECD -Organisation for Economic Cooperation and Development).


 


* There are significant differences between "classical" sales at the wholesale stage and the cash and carry wholesaler: These differences are based in particular on the fact that customers of the cash and carry wholesaler arrange the transport of the goods themselves and pay the goods in cash and not on credit. (EU Commission Decision (Kesko/Tuko) of November 20, 1996 (97/277/EC)).


Historic meaning

The policy of cash and carry established at the onset of World War II in 1939 revised the Neutrality Acts that were established by US President Roosevelt in order to instill a sense of neutrality between the United States and the war that was raging in Europe. The economic situation in the US was rebounding at this time (after the great depression) but there was still a need for industrial manufacturing jobs. The Cash and Carry program helped to solve this issue and in turn the US benefited through the sale of war supplies to her allies.


 


This program was also beneficial for the British and French who were not faring well in response to Germany's militarism and were in need of war materials. Any allied ship that could make the risky trip across the North Atlantic to US coastal ports could get war materials for cash.


 


Despite its success, this policy soon left European allies (primarily Britain) bankrupt and this forced US leaders to revise the plan. The revised plan is known as the Lend-Lease program, in which the European allies no longer had to pay cash or arrange their own transportation. Instead, the United States would provide this for them and later payment was expected.


 


In keeping with the Monroe doctrine the US didn't actively participate in the war until both Japan and Germany declared war on them too, after which they switched from allied assistance to active engagement.

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