Topic 5: Trade (Home Trade)

1. Meaning of Trade

Trade is the buying and selling of goods and services.

• Home (domestic) trade: within a country: wholesale and retail.
• Foreign trade: between countries: imports, exports and entrepot.

2. Wholesale Trade

Selling goods in bulk to retailers, institutions and other businesses.

Functions of Wholesalers

1. Buy in bulk from producers.
2. Break bulk into smaller quantities.
3. Store goods and reduce storage burden on producers and retailers.
4. Provide credit to retailers.
5. Give market information to producers and retailers.
6. Transport or deliver goods.
7. Take on risks (e.g. price changes, spoilage).

3. Retail Trade

Selling goods in small quantities to the final consumer.

Functions of Retailers

1. Stock goods near consumers.
2. Sell in small quantities.
3. Offer credit and after-sales services.
4. Give consumers advice and information.
5. Display and advertise goods.
6. Grade and package goods.

Types of Retailers

Small-scale:

• Hawkers and peddlers
• Kiosks
• Market traders and stalls
• General shops (dukas)
• Mobile (van) shops

Large-scale:

• Supermarkets and hypermarkets
• Department stores
• Chain stores
• Co-operative retail societies
• Online shops

4. Aids to Trade

Services that facilitate trade:

1. Banking: payments, savings and loans.
2. Insurance: protects against risks.
3. Transport: moves goods.
4. Warehousing: stores goods.
5. Communication: spreads information.
6. Advertising: informs and persuades customers.

5. Chain of Distribution

Producer → Wholesaler → Retailer → Consumer

Producers may sell direct to consumers (e.g. a farmer at the market) or to retailers, shortening the chain.