Internal Trade: Wholesale and Retail

Internal Trade

• Internal trade refers to the exchange of goods within a country's boundaries.
• Wholesaling is a category of internal trade that involves the purchase and sale of goods and services in large quantities for resale and intermediate use.

Role of Wholesalers

• Wholesalers perform crucial tasks in the distribution of goods and services, such as breaking bulk, making goods available at the right time and place, and providing storage facilities.
• Wholesalers provide the utility of place and time by making goods available when and where they are required for consumption or use.
• Wholesalers facilitate large-scale production by enabling manufacturers to produce goods on a large scale, thereby reducing costs.

International Trade

• International trade refers to the purchase and sale of goods and services between different countries.

Wholesalers' Functions

• Wholesalers help in the marketing function by facilitating large-scale production, breaking bulk, and providing storage facilities.
• Wholesalers provide the service of storage, which reduces the retailer's workload.
• Wholesalers help retailers by providing goods in the required quantities, thereby reducing the retailer's risk.
• Wholesalers play a crucial role in providing services to retailers, including the provision of credit and reduction of risk.

Retailers' Role

• The main role of retailers is to make goods available to the ultimate consumers.

Wholesalers' Benefits

• Wholesalers provide the benefit of storage, which reduces the retailer's workload.
• Wholesalers play a crucial role in facilitating production continuity by ensuring a steady supply of goods to retailers.
• Wholesalers reduce the retailer's work by performing tasks such as breaking bulk and providing storage facilities.
• Wholesalers provide the service of granting credit to retailers.
• Wholesalers reduce the retailer's risk by providing goods in the required quantities.

Finance

• Equity shares are a source of permanent capital for a company, with the primary characteristic of being a source of long-term finance.
• Equity shareholders have the ability to influence decision-making in a company.
• Equity shares are distinguished from preference shares in that they do not have a fixed rate of dividend.

Preference Shares

• Preference shares have a fixed rate of dividend and are considered a hybrid security with preferential right of repayment.

Debentures

• Debentures are a source of borrower's fund, with a fixed rate of interest and a fixed repayment period.
• A trustee plays a crucial role in managing large numbers of debentures sold to the general public.

Trade Credit

• The volume and period of credit allowed in trade credit are determined by the buyer's creditworthiness and the supplier's credit policy.

Public Deposits

• Public deposits are a source of business finance that is distinguished from bank deposits in that they are raised directly from the public.

Inter Corporate Deposits (ICD)

• ICDs are a source of business finance that is characterized by deposits made by one company with another company.

Commercial Banks

• Commercial banks are a source of borrower's fund, with the distinguishing feature of providing short-term loans.

Retained Earnings

• Retained earnings are a source of business finance that is characterized by the company's retained profits.

Learn about the exchange of goods within a country's boundaries, known as internal trade. Explore the categories of internal trade, including wholesale trade and retail trade, and understand the formalities involved in these transactions.