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## 2.1 Introduction Trade plays a vital role in the economy of every country. The overall development of economy is an outcome of proper functioning of trade. Buying and selling of goods and services for money's worth is fundamental feature of trade. The original form of trade was barter, the dire...

## 2.1 Introduction Trade plays a vital role in the economy of every country. The overall development of economy is an outcome of proper functioning of trade. Buying and selling of goods and services for money's worth is fundamental feature of trade. The original form of trade was barter, the direct exchange of goods and services. After inventing money, the direct exchange of goods became greatly simplified. ## 2.2 Types of Trade On the basis of different criteria, trade can be divided into different types which are as follows: - **Trade** - **Internal Trade** - **Wholesale Trade** - **Retail Trade** - **Itinerant Retailers** 1. Hawkers 2. Peddlers 3. Street Traders 4. Cheap Jacks 5. Market Traders - **Fixed Shop Retailers** - **Small scale Retailers** 1. General Stores 2. Second hand goods shops 3. Authorized dealers 4. Specialty shops - **Large scale Retailers** 1. Departmental Stores 2. Supermarket stores 3. Chain stores 4. One prices shops 5. Malls - **External Trade** - **Import** - **Export** - **Entrepo** ## 2.2.1 Internal Trade When the goods and services are purchased or sold within the country it is referred as Internal Trade e.g. purchasing goods from the door salesmen, local shop, exhibition, regional markets, departmental store or a mall are the examples of internal trade. When the buyers and sellers both are from the same country, it is known as internal trade. Trade between two states or cities of same country is also considered as internal trade. As there is a gap between production and consumption, there is a need to have proper channel of distribution. The channel of distribution is very important in the internal trade. Usually, producers are situated at one place whereas the consumers are scattered over a wide area. There is a big gap between producer and consumer. This gap can be shortened through different intermediaries. ## Channel of Distribution - Producer/Manufacturer - Wholesaler ## Types of Internal Trade: There are two types of Internal Trade i.e. Wholesale and Retail Trade. - **Wholesale Trade:** - When goods are purchased in large quantity for the purpose of resale to retailers, it is known as Wholesale Trade. A wholesaler is known as a whole seller as he buy goods in bulk and sell it to retailers so wholesaler is considered as link between producers and retailers. It enables the producers to reach the consumers. - **Definition** 1. According to Philip Kotler, Wholesalers are traders who sell goods or services to those who buy them for resale. 2. According to Evelyn Thomas, a wholesaler is not a retailer but act as a link between producers and retailer. - **Features of Wholesaler** 1. A Wholesaler purchases goods in bulk from producers. 2. Wholesaler has to take risk related to the goods, as wholesalers purchase goods in bulk. 3. A Wholesaler deals with only a small number of customers 4. A large amount of capital is required in wholesale business 5. A wholesaler maintains records for the goods purchased. 6. The manufacturers can sell their goods in large quantities to wholesalers 7. A Wholesaler sells the goods to retailers at a higher price 8. A Wholesaler performs various functions like buying, selling, transporting,, grading, packing, storing, etc. - **Services of Wholesalers** - **Services to Manufacturers** 1. Large Purchase: Manufacturers can sell their goods in larger quantities to wholesalers and sell it to retailers. 2. Storage: A Wholesaler can provide storage facilities for the manufacturers.