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Keywords
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symbols/theme
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definition
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little imp
Internal trade
, Meaning
Trade refers to buying and selling of goods and services for earning profit. When buying and selling of
goods and services takes place within the geographical limits of a country, it is known as Internal Trade. It
is also known as Home Trade or Inland Trade. In Internal trade, payments for goods and services are
made and received in a country's national currency only.
Main features of Internal trade
(i) The buying and selling of goods and services takes place within a country.
(ii) The payments are made and received in the home currency only.
(iii) There are no or very few formalities to be completed by the traders.
(iv) Various local modes of transport can be used for transfer of goods and services.
Types of Internal trade
Intral trade can be classified into two categories:
(i) Wholesale trade (ii) Retail Trade
Wholesale trade
Wholesale Trade refers to the trade in which goods are sold in large quantities. The person who carries on
wholesale trade is known as wholesaler. Wholesaler buys the goods directly from the manufacturer in bulk
and sells lots to the retailer.
, Features of Wholesale Trade
(i) Wholesaler acts as a link between producer and retailer.
(ii) Wholesaler deals with large quantities of goods.
(iii) Wholesaler is generally specialised in one line of product. For example, stationery, foodgrains, etc.
(iv) Wholesaler invests large amounts of capital in maintaining stock of goods.
(v) Wholesaler generally sells goods in small lots to retailers and generally does not sell to the ultimate
consumer.
(vi) Generally the margin of profit of wholesaler is low.
(vii) Wholesaler is the first intermediary in the distribution chain.
Services of the Wholesalers
A wholesaler provides many valuable services to the manufacturer as well as the retailer.
Services to manufacturer
Wholesaler renders the following services to the manufacturer:
(i) Facilitate large scale production and Economies of scale. Economies of scale refers to benefits of
operating at a large scale. Wholesalers help
the manufacturers to avail the benefits of large-scale operations as they buy goods in large quantity.
They buy in bulk which enables the manufacturers also to produce in bulk and avail benefits of large-
scale production.
(ii) Helps in Marketing Functions. Wholesalers employ a sales force to reach retailers located in far corners
of the country. The salepersons of wholesalers perform the task of
persuading the retailers to display and sell the goods at their retail outlets.
(iii) Expert advice. The Wholesaler provides information regarding the preference and expectations of the
customers to the manufacturer. He also collects information regarding the products of
competitors, price of the products, etc. Wholesalers' makes suggestions about the types and quality of
goods required by the consumers. Such information helps the producer to regulate production according
to the changing requirements of the consumers.
Keywords
-
imp
-dates/names
-
symbols/theme
-question
-
definition
-
little imp
Internal trade
, Meaning
Trade refers to buying and selling of goods and services for earning profit. When buying and selling of
goods and services takes place within the geographical limits of a country, it is known as Internal Trade. It
is also known as Home Trade or Inland Trade. In Internal trade, payments for goods and services are
made and received in a country's national currency only.
Main features of Internal trade
(i) The buying and selling of goods and services takes place within a country.
(ii) The payments are made and received in the home currency only.
(iii) There are no or very few formalities to be completed by the traders.
(iv) Various local modes of transport can be used for transfer of goods and services.
Types of Internal trade
Intral trade can be classified into two categories:
(i) Wholesale trade (ii) Retail Trade
Wholesale trade
Wholesale Trade refers to the trade in which goods are sold in large quantities. The person who carries on
wholesale trade is known as wholesaler. Wholesaler buys the goods directly from the manufacturer in bulk
and sells lots to the retailer.
, Features of Wholesale Trade
(i) Wholesaler acts as a link between producer and retailer.
(ii) Wholesaler deals with large quantities of goods.
(iii) Wholesaler is generally specialised in one line of product. For example, stationery, foodgrains, etc.
(iv) Wholesaler invests large amounts of capital in maintaining stock of goods.
(v) Wholesaler generally sells goods in small lots to retailers and generally does not sell to the ultimate
consumer.
(vi) Generally the margin of profit of wholesaler is low.
(vii) Wholesaler is the first intermediary in the distribution chain.
Services of the Wholesalers
A wholesaler provides many valuable services to the manufacturer as well as the retailer.
Services to manufacturer
Wholesaler renders the following services to the manufacturer:
(i) Facilitate large scale production and Economies of scale. Economies of scale refers to benefits of
operating at a large scale. Wholesalers help
the manufacturers to avail the benefits of large-scale operations as they buy goods in large quantity.
They buy in bulk which enables the manufacturers also to produce in bulk and avail benefits of large-
scale production.
(ii) Helps in Marketing Functions. Wholesalers employ a sales force to reach retailers located in far corners
of the country. The salepersons of wholesalers perform the task of
persuading the retailers to display and sell the goods at their retail outlets.
(iii) Expert advice. The Wholesaler provides information regarding the preference and expectations of the
customers to the manufacturer. He also collects information regarding the products of
competitors, price of the products, etc. Wholesalers' makes suggestions about the types and quality of
goods required by the consumers. Such information helps the producer to regulate production according
to the changing requirements of the consumers.
