Internal Trade Meaning, Wholesale Trade, Retail Trade with Examples.
So while import and export are important for the economy of a nation, most of its GDP contribution comes from internal trade. Let us study it in some detail. Internal Trade and Wholesale Trade; Retail Trade; Types of Retailing Trade; Fixed Shop – Large Retailers and Chain Stores or Multiple ShopsBoth the buyer and seller belong to the same territorial boundaries. For instance, trade between Bangalore and Chennai is internal trade. Payments are made or received in local currency. Characteristic features of internal trade. 1. Internal trade is carried on within the boundaries of one country.In most countries internal trade ranks second or third among types of industries generating the national product, but it has been a stepchild of.Q. What do you mean by Internal Trade? Q. Who are Itinerant retailers? Q. Large quantity buying is characteristic of which trade? Q. Goods with little defects are sold as what type of goods? Q. Used goods are bought and sold in which type of shops? Q. What do you mean by retailers? Q. Who are wholesalers? Multi options general trading llc. I. Short Answer Type Questions Question 1. What is meant by internal trade? Answer Internal trade refers to the buying and selling of goods.Home Trade, also known as Domestic Trade or Internal Trade can simply be defined as the act of buying and selling of goods and services within the boundaries of a country. In home trade, a single currency is used as means of exchange. Home Trade comprises wholesaling and retailing. Types of Home Trade. Retail trade; Wholesale trade. Retail TradeCHAPTER – 10 INTERNAL TRADE LEARNING OUTCOMES describe the meaning and types of internal trade; specify the services of wholesalers to.
Reviewing Different Types of Traders. Scalping. The scalper is an individual who makes dozens or hundreds of trades per day, trying to "scalp" a small profit from each trade by exploiting the bid-ask spread. You can read about scalping in " Introduction to Types of Trading Scalpers." Momentum Trading.Description Held annually, biannually, or even quarterly, these two types of meetings can be small internal meetings of board members or prestigious large-scale business events for shareholders that range in size depending on the size of the company and shareholder turnout.Describe the meaning and types of internal trade;. • specify the services of wholesalers to manufactures and retailers;. • explain the services of retailers;. But in the development of price and output theory, economists have dealt primarily with the structure and performance of the raw-material and manufacturing industries (or with transport and electric power) and have treated these as if manufacturers sold finished products directly to consumers or, alternatively, as if the distributive trades were analytically neutral.Except in an occasional empirical study (e.g., Adelman 1959, pp.109-149, 248-274), the distributive trades have been neglected in their roles as buyers from, or as potential entrants into, supplying industries (whereby they influence significantly the performance of earlier-stage markets), or as resellers that affect the information provided about, and consumers’ choices among, goods made by rival manufacturers.
Location of buyers and sellers, trade can broadly be classified into two categories i Internal trade; and ii External trade. Trade which takes place within a country is called internal trade. Trade between two or more countries, on the other hand, is called external trade. The present chapter discusses in detail the meaning and nature of internal tradeTOPICS COVERED 1 MEANING & CONCEPTS OF INTERNAL TRADE. 2 TYPES OF INTERNAL TRADE - WHOLESALE AND RETAIL.For the success of business, it is important to understand all the key types of international trade theories. The concept of international trading is not limited to, just sending and receiving products and services and putting all of the profits in the pockets. Spot gold trading hours. But once some goods are supplied by others there is trade, even though the maker of the goods is himself the seller to consumers.Long before recorded history, when a locality produced a surplus of a commodity traders distributed the goods elsewhere.The industrial revolution greatly enhanced specialization by, and transfers among, establishments, firms, and localities involved in the various vertical steps from raw material to finished consumer goods production.While such transfers can occur between establishments in common ownership (even within the government, say), trade ordinarily connotes exchanges between autonomous units whose activities are coordinated through market transactions.
Meaning and Types of Internal Trade – Questions
Indeed, internal trade differs from international trade only in that the latter involves transactions beyond the boundaries of a sovereign political authority, which ordinarily imposes restraints on trade that inhibit geographic specialization in production or, alternatively, the geographic mobility of labor and capital. Of the total value of all articles supplied to households, internal trade accounted for almost 43 per cent (ibid., p. Nearly 12 of these 43 percentage points were accounted for by trading activities of the nondistributive industries, chiefly those producing commodities. Because this is an estimate of “value added,” it excludes the distributive trades’ purchases of supplies, power, fuel, transportation, and advertising, and, for this reason, is much lower than the composite wholesale-retail gross margins cited below.In the broad usage, including transportation, warehousing, and advertising, internal trade accounted for about 40 per cent of the value of goods as bought by all final buyers in the United States in 1947 (Cox et al. The remaining 31 points were attributed to the distributive industries—3 of these points represented value added by transportation and storage, almost 2 were added by advertising, and the residual of almost 27 per cent was provided by the wholesale and retail industries (adapted from Cox et al. Were comparable data for other countries available, they probably would reflect the degree of specialization in commodity production among ownership units and the comparative efficiency of such productive activities and of trading.The economic function of the distribution to consumers of goods in final physical form consists of providing the satisfaction of “place and time utility” —to which one can add “information utility.” Manufacturers perform part of these services by packaging goods, receiving orders, and shipping or arranging transportation. Manufacturing trade. Some would include manufacturers’ advertising and sales personnel costs (Twentieth Century Fund 1939, pp.6, 7); but much of this activity is directed to persuading consumers to buy manufacturer A’s brand rather than B’s on grounds other than clear-cut superiority—the form of rivalry elected because the structure of some manufacturing industries lessens or estops price competition [see Oligopoly].Further analysis will be directed, therefore, primarily to the wholesaling and retailing of finished goods to households and other small-scale purchasers.
Because commodity production is more specialized geographically than are the locations of consumers, commodities must be assembled from many areas and a stock held in the locality of consumption.This is the function of wholesaling, whether done by a manufacturer’s branch, an autonomous enterprise, or a purchasing-warehousing operation owned by one or by many retailers.Making the goods available at the specific place and time consumers prefer and providing some information are the functions of retailing. Blinds & curtains furnitures trading llc. [[Only then is production in the economic sense complete. Symmetrical with the distributive trades’ product is the “price” of the distributive services, which is defined as the gross margin between invoice cost of the good landed at the wholesaler’s or retailer’s establishment and the resale price.This margin is usually expressed as a percentage of the latter.When analyzing economic performance of a distributive trade, the article-by-article gross margins are not as important as is the margin obtained on a group of articles or even for a type of outlet as a whole.
NCERT Solutions For Class 11 Business Studies Internal Trade
Most costs of wholesaling and of retailing are both common and joint among the goods handled, although there is some opportunity in the long run to alter what is handled.But the selling in the same space and by the same personnel of items that have similar purchasing characteristics from the consumers’ point of view, although they may differ widely in consumer use, means that selling one food is facilitated by simultaneously offering other foods and other household articles that consumers’ behavior indicates they prefer to buy in the same outlet.Consequently, the intensity and elasticity of demand for the service of various retailers reflect primarily consumer preferences among composites of prices, locations, and qualities of service offered by retailers of families of articles. The gross margin is a weighted average of margins on the various articles in the group.For example, the storewide gross margins of large-chain food retailers (including purchasing and warehousing operations) averaged about 15 per cent in early 1942, but the average margins for individual dry-grocery articles in the United States (as found by the Office of Price Administration 1943) ranged from about 7 to more than 20 per cent.Such differences must reflect the net outcome of rivalry among food stores, each of which seeks, as a multiproduct firm, to adjust margins on various articles so as to maximize the return on its investment in retailing (Holdren 1960).
But the social performance consists of the efficiency and price of the distributive service for families of articles or for the whole outlet. Distribution does cost much or, it is equally correct to say, produces much. food chains report ratios of operating expenses to sales for the composite of their purchasing, warehousing, and retailing (Earle & Sheehan 1966, pp.“Trade and commerce,” identified as primarily wholesale and retail trade but explicitly excluding transportation, contributes between 6 and 20 per cent of the gross product of most nations (circa 1958). 14-15) that vary inversely with firms’sales volumes.The percentages are positively but not highly correlated with per capita output (United Nations 1963, pp. But these differences are related to the fact that the smaller chains buy to a large extent through wholesalers and therefore pay somewhat higher prices for goods that are delivered to their stores. Top 10 most traded currencies. 491-497; Yearbook of National Accounts Statistics 1962, pp. The chief exceptions to this correlation are the high shares of trade in total output in most Mediterranean countries and the low shares reported for communist countries, of which more later. In the Western countries the share of wholesale and retail distribution in total economic activity has risen generally with historical advances in output per capita. The observed success of large-chain retailers stems primarily from lower invoice cost of goods, which is achieved through skill in purchasing combined with volume enough in each locality to turn wholesaling into a logistics-type warehousing operation.But using the percentage of the labor force employed in retailing to indicate distribution’s share, the correlation with per capita gross product is high in western Europe (Jefferys & Knee 1962, p. A similar indication is the higher general level of retail margins in the United States than in Great Britain (Hall et al. This can be deduced from the small increase in sales per person engaged in these activities from 1910 to 1950 in the United States and Great Britain (Hall et al. 10) compared to the known much sharper rise over this period in productivity in commodity production. Economies of size are quite limited for the individual retail outlet but not for the firm. Gain from large size is limited by the added costs of advertising, or the lower gross margin, needed to attract more customers to one location. An important phase of purchasing is specification-buying, or even own-manufacturing, of goods to be resold under a chain’s own brands.A similar inference can be drawn from the advance in the ratio of employment in distribution to employment in commodity production over recent decades in western Europe (Jefferys & Knee 1962, p. There is no fully satisfactory measure of the output of the distributive trades. Measured by sales per person engaged in food and in shoe retailing in Britain and the United States, efficiency is substantially higher for moderate-sized shops than for small ones but very little higher, and in some cases lower, for large stores (Hall et al. A firm of more than very small size usually engages in multisite operations, but neither British nor United States data show clearly higher sales per person engaged (except for food stores) in shops of a given size for chains above about ten outlets (Hall et al. Chains have also gone far in rationalizing the retailing step but they clearly did not initiate important innovations at that step.
10) and over an eighty-year period in the United States (Barger 1955, p. The physical volume of goods sold at retail, weighted by distributive margins in various lines of trade, is affected by differences in the quality of distributive service among times, places, and types of outlets. In Britain, Canada, and the United States giant chains have no clear advantage over those of moderate size in the distribution (but do at times in procurement) of food and of low-priced clothing, furniture, and hardware, when providing qualities of articles and of distributive service consumers expect at the prices charged.8), and from the substantial rise from 1869 to 1909 in distributive margins for most commodity lines in the United States, followed by a very slow upward creep to 1948 (ibid., pp. This is consistent with the increase from 1929 to 1958 of distribution’s share of the gross national product of the United States—with government activity omitted (Cox et al. (These defects do not affect the significance of distributive margins themselves insofar as differences in quality of service affect costs.) Retail sales per person engaged are the only data available for most comparisons and, after adjustment for price level, can be quite useful. Offsetting changes in organization and practices of the few-store chains and of single-outlet retailers have slowed down large-chain growth, as will be seen below. In substantial degree the historical rise in distribution’s share of gross output reflects the lesser advance in productivity in distribution than in commodity production.Both measures show similar changes in output per person engaged in the United States from 1910 to about 1950 (cf. In the United States output per worker in commodity production in 1949 was over five times the 1869 level but in distribution less than twice (Barger 1955, p. In western Europe sales per person engaged in distribution rose sharply between the 1930s and the late 1950s, but the ratio of employment in distribution to that in commodity production rose nevertheless (Jefferys & Knee 1962, pp. As real incomes rise in advanced countries distributive margins tend to account for a higher percentage of the retail value of consumer goods. The minimum deposit amount to any broker. In addition to the much less rapid advance of productivity in distribution than in commodity production, there is the fact that at higher income levels a larger proportion of consumer demand is for goods for which retail margins are relatively wide (Barger 1955, p. Hence distributive margins for most types of goods rose historically in the United States (the only country for which long-period estimates are available), particularly prior to World War I (ibid., pp. For the same reason, distributive margins were substantially higher in the United States than in Britain in 1948-1950 (Hall et al. 26), except in food distribution where innovation in the former country had reduced labor input sharply. Even with food declining in relative importance, the composite distributive margin for all goods sold at retail in the United States rose substantially prior to World War I (Barger 1955, p. After that date, innovations in distributive organization and methods, chiefly in food distribution, and the lower quality of retail service provided by the burgeoning mass distributors, slowed down the advance of the composite margin on all goods.In Great Britain and the United States post-World War ii margins ranged from a low of about 20 per cent for food up to more than 40 per cent for furniture and jewelry (Hall et al. The very low distributive costs, of about 7 per cent of retail prices, reported for the Soviet Union do not reflect corresponding efficiency.By including in retail sales a turnover tax of about 40 per cent of retail prices, the denominator in computing distribution costs as a per cent of retail sales volume is enlarged correspondingly.
(General retail sales taxes are not included in reported retail sales volume in the United States, for example.) After eliminating the Soviet turnover tax and making other adjustments so that the data are more comparable with those for the United States, the Soviet percentage is doubled but even then remains far lower.The very low quality of retail service and high proportion of all consumer goods that consists of food (the lowest-margin category in the United States) in communist countries vitiates comparison of over-all distributive costs and margins between them and advanced capitalist countries.Recently, the added variety of consumer goods and the lessening of rationing by queues, plus higher quality of retail service, have led to an upward trend in distribution costs in the Soviet Union (Goldman 1963, pp. For reasons cited in the preceding paragraphs, available data do not permit precise comparisons of the efficiency of finished good distribution among commodity lines, among nations, or for a given nation at different dates. Dubai trade center contact number. But much of value can be concluded for free enterprise economies from the developments in and characteristics of distributive trade markets and of consumer behavior. While productivity has advanced more rapidly in commodity production than in distribution, a fundamental innovation in organization, often called “mass distribution,” has altered the size of retail outlets, influenced even more the size of the firm and the degree of vertical integration, and worked toward lower gross margins.Starting in the United States in the last century, primarily in food but extending progressively to apparel, “hard goods,” and selling by mail, the innovation spread to Canada decades ago, then, after a considerable interval, to Britain and Australia, but not to western Europe until after 1945.It has not yet been adopted widely in other countries.