INTERNAL TRADE

 

Meaning- Refers to the trading of goods and services within the national boundaries of a country

➢ Features of Internal Trade

i. Trading of goods takes place within the national boundaries of a country.

ii. All transactions are in national currency.
iii. Various local modes of transport are used for the movement of goods.
 

➢ Types of Internal Trade

Internal trade can be classified into the following two categories:

• Wholesale trade
• Retail trade

➢ Meaning- Refers to buying and selling of goods in bulk, usually for resale in local markets.

➢ Characteristics of Wholesalers

• Act as a link between the producers and retailers
• Deal in single line of products
• Trade in bulk quantities
• Provide various services to both manufacturers and retailers

➢ Functions of a Wholesaler

• Purchasing and selling goods in bulk
• Bearing the risk
• Providing warehousing and other facilities
• Packaging, grading and promotion of goods

➢ Services Rendered by Wholesalers to Manufacturers

The following are the services offered by wholesalers to manufacturers:

i. The bulk purchase made by wholesalers encourages and facilitates large-scale production by the manufacturers.

ii. Help reduce the burden of storage of finished goods on the manufacturers

iii. Provide useful market information, such as the tastes and preferences of customers, the prevailing market conditions, level of competition in the market and type of goods demanded by consumers

iv. Provide warehousing facilities, there by protecting the manufacturers from risks related to theft, spoilage or fire

v. Provide financial assistance such as providing advances to the manufacturers while placing the order.


vi. By storing the goods from the time of production till the final sale, they facilitate continuity in production

vii. Help in marketing and distribution of goods over large geographical areas

• Services rendered by Wholesalers to Retailers

The following services are provided by wholesalers to retailers:

i. Supply goods produced by different manufacturers simultaneously
ii. Perform a variety of marketing functions such as advertising, thereby, helping the retailers save their time and money
iii. Offer goods to retailers on credit basis, which in turn helps in reducing their working capital requirement
iv. Pa…