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Commerce - Types of Trade - 3

The document outlines the types of trade, distinguishing between home trade (within national boundaries) and foreign trade (across the globe), along with the aids to trade such as banking, transport, and communication. It compares home and foreign trade in terms of similarities and dissimilarities, including aspects like currency, government policies, and documentation. Additionally, it discusses home trade's subdivisions into wholesale and retail trade, and various channels of distribution from producers to consumers.

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wilokan123
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10 views3 pages

Commerce - Types of Trade - 3

The document outlines the types of trade, distinguishing between home trade (within national boundaries) and foreign trade (across the globe), along with the aids to trade such as banking, transport, and communication. It compares home and foreign trade in terms of similarities and dissimilarities, including aspects like currency, government policies, and documentation. Additionally, it discusses home trade's subdivisions into wholesale and retail trade, and various channels of distribution from producers to consumers.

Uploaded by

wilokan123
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Commerce: Trade and Aids to Trade Ch: 1 .

2
Types of Trade
Home Trade is buying and selling of goods and services within international boundaries.
Foreign Trade is buying and selling of goods and services across the globe.
Aids to Trade
Services which are required to facilitate trade.
Aids to Trade Function
Banking Provides Finance and Services.
Transport Without means of transportation it is impossible to trade.
Communication To transmit and receive information quickly.
Insurance Absorbs some of the risks in production and trade.
Warehousing Provides storage facilities.
Advertisement Inform customers about products.

Comparison of Home Trade and Foreign Trade


Similarities between Home Trade and Foreign Trade
1. Buying and selling of goods for making profit.
2. Serve mankind by satisfying needs and wants.
3. Requires aids to trade.
4. Require surplus to be created.
5. Work on the principle of specialization.

Dissimilarities between Home Trade and Foreign Trade


Home Trade Foreign Trade
Done within national boundaries. Done across the globe.
Same currency is involved. Different currencies are involved.
Same units of measurements. Different units of measurement.
Same government policies. Different government policies.
No taxes are involved. Import/Export taxes are involved.
Simple Documents. Complex Documents.
Same culture and language Different culture and languages.
Mode of Payment is cash, cheque etc. Mode of payment is online transfer, bill of exchange etc.

Mode of transportation is through land or Mode of transportation is through sea or air.


rail.
Small and big quantities are involved. Only large quantities are involved.

Page 5 of 89
Page 6 of 89
Home Trade: The Retail Trade Chapter 2

Home Trade
Home trade consists of buying and selling of goods with the aim of making profit among
people of the same country. Home trade can be divided into wholesale trade and retail
trade.

Wholesale Trade
Wholesale trade deals with the bulk buying of goods from various manufacturers and the
breaking down of this bulk into smaller quantities which is then sold to the retailer.
Wholesaler is a intermediary distributer.

Retail Trade
Retail trade deals with the buying of goods in small quantities from the wholesaler and
selling of goods in yet smaller quantities to the final consumer. A Retailer is a
intermediary distributer.

Channel of Distribution
 This is the way in which goods are delivered from the producer to the customer.
 Channel of distribution ends when goods are delivered to the point of consumption.
 Ends when the form of good is changed.

Different Channels of Distribution


1. Producer to the consumer
Expensive, technical, perishable, exclusively made for one customer.
2. Producer to retailer to consumer
Large scale retailer, producer’s own outlet, suitable for perishable items for example
bakery.
3. Producer to wholesaler to retailer to consumer
Standardized, consumer items, low value and high shelf life, suitable when demand of
products are seasonal or the production is seasonal.
4. Producer to agent to wholesaler to retailer to consumer
Only in case of international trade. Overseas producer appoints a agent in home market.
For example imported cars and cosmetics.

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