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To Word 12-11-2023 16.43

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7 views3 pages

To Word 12-11-2023 16.43

Uploaded by

touhiddewan2
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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(1) Trade:

Trade is an integral part of commerce. It simply refers to sale, transfer or exchange of goods and services. It helps in making the goods
and services available to ultimate consumers. The manufacturers of goods who produce in bulk or large quantity generally find it very
difficult to sell those goods directly to the consumers.The reasons may be distance of the consumers from the place of
manufacturing,or the quantity of the product bought at one point of time, the problem of payment and so on. Hence they utilise the
services of some firms or individuals who buy goods from the manufactures and sell it to the consumers.For example, the local grocery
shop owner sells grocery iters to the consumers after buying it from the manufactures. Sometimes, he buys it from the wholesalers
who buy goods in bulk from the manufactures and sell it to him. It may be noted that the wholesalers as well as the grocery shop
owners are said to be engaged in trading. Thus, the features of trade can be summed up as follows:

(a) It involves actual buying and selling of goods;


place;(b) It refers to procuring goods from one place/person to sell it to another person or at another
(c) Traders, also known as middlemen facilitate the distribution of goods;

Sheikh Shamima Sultana, Assistant Professor, Department of Marketing, University of Rajshahi,Bangladesh.


(d) Trading helps in equalising demand and supply. For example, the state of Punjab may be producing plenty
of rice without much demand for it in its own state. Traders buy rice from Punjab and make it available to states like
Orissa and West Bengal where there is a great demand for rice.Thus,the demand and supply ratio is maintained.

On the basis of area of operation, trade can be classified as under -

(a) Internal Trade; and


(b) it can be buying from manufacturers or wholesalers and selling it to consumers (known as retail trade).

(b) External Trade:

Trade that takes place between different countries is known as external trade. In other words, external trade refers
to buying and/or selling of goods/services across national boundaries. This may take any of the following forms:

(i) Firms of country 'A' purchase goods from firms of county 'B' to be sold in their own country. This is known as
Import trade.

(ii) Firms of country 'A' sell goods produced in their own country to firm of country 'B'.This is known as Export trade.

(iii) Firms of country 'A' purchase goods from firms of country 'B' to be sold to firms of country 'C'. This is known as
Entrepot trade.

(2) AIDS/Auxiliaries to trade:

To facilitate buying and selling of goods (trade) a variety of other activities are required to be performed.
These include, transport of goods, storage of goods, financial transactions, insurance of goods etc. For
example, when a company at Chennai buys goods from Delhi or imports it from Singapore, it needs to
undertake most of the following activities, in addition to buying and selling of goods. These activities are-

·Carrying of goods physically from Delhi/Singapore to Chennai (called Transportation)

·Systematic storage of goods once the goods are received at Chennai (called Warehousing).

·Arranging money and making payments to the seller through banks and other sources (called Banking).

·Covering risk of damage/loss of goods in transit from Delhi/Singapore or while it is in store (called Insurance)

·Exchange of information with each other through postal and telecom services (called Communication).
Sheikh Shamima Sultana,Assistant Professor, Department of Marketing,University of Rajshahi, Bangladesh.

All the above activities help in facilitating the trading activities or providing support to the trading

activities. That is why these are called auxiliaries to trade. So auxiliaries to trade refer to those activities

that facilitate trade. These activities not only facilitate the trading activities, but also provide the

necessary support to the entire business in its successful functioning. Hence, these are also called

support services of business. In the next lesson we shall discuss about all these support services of

business in detail.

Classification of Trade:

On the basis of area of operation, trade can be classified as under-

(a) Internal Trade; and

(b) External Trade.


(a) Internal Trade:

When trade takes place within the boundaries of a country it is called internal trade. It means both the buying and selling take place
within the country. For example, a trader can buy woolen garments from the manufacturers at Ludhiana and sell it to the retailers in
Delhi. Similarly a trader of a village can buy goods from the wholesale market of a city for sale in the village. From these
twoexamples,we find that internal trade can be

(a) buying from manufactures and selling it to retailers in bulk (known as wholesale trade); or

(b) it can be buying from manufacturers or wholesalers and selling it to consumers (known as retail trade).

(b) External Trade:

Trade that takes place between different countries is known as external trade. In other words, external trade refers to buying
and/or sellin of goods/services across national boundaries. This may take any of the following forms:

(i) Firms of country 'A' purchase goods from firms of county 'B' to be sold in their own country. This is known as Import trade.

(ii) Firms of country 'A' sell goods produced in their own country to firm of country 'B'.This is known as Export trade.

(iii) Firms of country 'A' purchase goods from firms of country 'B'to be sold to firms of country 'C'. This is known as Entrepot trade.

Requisites of a successful Business:

1. Planning:

Business planning is vital to keeping your company pointed in the right direction. Take the time to create a thorough
plan--giving thought to product development, operations, marketing, financing,business models and staffing issues--
before you begin to build your business. Planning is not only important in Sheikh Shamima Sultana, Assistant
Professor, Department of Marketing, University of Rajshahi, Bangladesh.

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