Tanubhrt.This.Side

Note: The notes prepared in this blog have been used using NIOS

Where can the goods produced within the country be sold at?

The goods produced within the country can be sold within the country or outside the country.

What is internal trade?

When buying or selling of goods and services takes place within the geographical boundaries of the country, it is called as internal trade.

Where can the internal trade take place?

The internal trade can take place between buyers and sellers in the same locality, village, town or city, or may be different states. But it is always within the same country.

What are the other names for internal trade?

Internal trade are also called as domestic trade or home trade.

What are the features of internal trade?

The features of internal trade are –

1. The buying and selling of the goods take place within the boundaries of the same country.
2. Payment for goods and services is made in the currency of the home country.
3. It involves transactions between the producers, consumers and the middlemen.
4. It consists of a distribution network of middlemen and agencies engaged in exchange of goods and services.

Where do mostly people buy goods of their daily use?

Mostly people buy it from the local shopkeepers.These shopkeepers buy goods in bulk and sell them to us as per their requirements.

Where do shopkeepers buy their products?

Shopkeepers generally buy goods in large quantity either from the producers directly or from any other shops that sell goods in bulk.

What are the different types of shopkeepers?

There are some shopkeepers who buy goods in bulk and sell to others in bulk while other buy in bulk and sell in small quantities as per the requirements of the customers.

What are the different types of trades?

There are two types of internal trade-

1. Wholesale trade
2. Retail trade

What is whole sale trade?

Whole sale trade refers to buying of goods in large quantities from producers or manufacturer for sale to other traders or buyers in small quantities.

Who are whole salers?

Those who are engaged in the wholesale trade are called wholesalers.

What is the reponsibility of a whole sale trader?

The whole sale traders act as a link between the manufacturers or producers and the small traders. Generally they specialise and deal in one or a few product.

Name the functions of whole sale traders?

Following are the functions of whole sale traders –

• assembling of goods
• grading and packing
• transporting
• warehousing
• financing
• risk bearing
• providing market information
• selling

Explain how does assembling of goods is done by wholesalers?

Wholesaler purchases goods from different manufacturers and holds adequate stock.

Explain how is grading and packing done by wholesalers?

Wholesalers divide the good according to their size, weight, shape and quality. In this way he prepares the goods in small lots for sale to retailers.

How is transporting done by wholesalers?

Wholesalers transport the goods from the production centers to his godown and from there to the retailers. Some wholesalers have their own vehicles for transportation of goods.

How do wholesalers do wholesalers?

Wholesalers keep the stock for retailers in the warehouse so as to make available goods to the retailers whenever they need them.

How is financing done by wholesalers?

Wholesalers buy goods from the manufacturers and sometime make advance payment. They sell goods to retailers on credit. In this way they finance the manufacturers as well as the retailers.

Explain how is risk bearing done by wholesalers?

Wholesalers bear the risk of changes in demand during storage. He also bears the risk of damage of goods, risk of bad debt etc.

How do wholesalers provide market information?

Wholesalers collect information about changes in the taste, fashion, buying habits etc of consumers from the retailers, then they pass this information to the manufacturers, so that the manufacturers may produce goods according to the requirements of the consumers.

What is the role of wholesalers in selling?

Retailers are widely scattered all over the country. Many wholesalers employ sales persons to take orders from the retailers. Thus, the wholesalers help in selling goods.

To whom do wholesalers provide services?

Wholesalers provide services to the following –

• manufacturers
• retailers

What kind of services do wholesalers provide to manufacturers?

Wholesalers provide following services to the manufacturers –

1. bulk buying
2. warehousing facility

What is meant by bulk buying?

Wholesalers collect orders from a large numbers of retailers and buy goods in large quantities from the manufacturers.

What do you understand by warehousing facility?

Wholesalers relieve the manufacturers from storing function by holding large stock of goods in their own warehouse. Therefore, manufacturer is relieved of the function of warehousing.

What are the services provided by the wholesalers to retailers?

1. Regular supply
2. Financial help
3. Advertisment
4. market information
5. Risk protection

How do wholesalers provide regular supply to the retailers?

Wholesalers keep a large stock of goods for retailers. They ensure that the goods are available to retailers at all times. In this way, they maintain regular supply of goods to the retailers.

In what ways is financial help provided by wholesalers to the retailers?

Wholesalers generally sell goods to retailers on credit. The retailers will make payment to wholesalers on the basis of the sales made. So, with less capital they can easily manage the business properly.

How do wholesalers do advertisement for the retailers?

Wholesalers advertise their good regularly, so the process becomes quite easy for the retailers.

What is the market information provided by the wholesalers to the retailers?

Wholesalers provide up to date information about the new product to the retailers.  Wholesalers advice retailers on matters like price, quality and time of purchase.

How do wholesalers ensure risk protection?

Wholesalers keep huge stock of goods and sell to retailers on credit. As a result, retailers have to bear a small risk.

What is retail trade?

Retail trade refers to buying goods from the manufacturers or wholesalers and selling the same to the ultimate consumers.

What do retail trader deal with?

The retail trader generally deals in a variety of goods.

What are people engaged in retail trade called?

Those who are engaged in retail trade are called retailers.

How do retailers sell goods?

Retailers sell goods in small quantities as per the requirements of the consumers.

What are the characterstics of the retail trade?

Following are the characterstics of retail trade –

1. Retail trade generally involves dealing with a variety of items.
2. A retailers makes purchases from the producers or wholesalers in bulk for sale to the consumers in small quantities.
3. Retail trade is normally carried on in or near the main market area.
4. Generally retail trade involves buying on credit from wholesalers and selling for each cash to consumers
5. A retailer has indirect relation with the manufacturer but a direct link with the consumers.

To whom does retailer provide services to?

Retailers provide the services to the consumers and wholesalers.

What are the services provided to the consumers by the retailers?

Retailers provide the following services to the consumers –

• Regular supply of goods
• Convinient location
• wide choice
• home delivery
• consumer education

What is meant bu regular supply of goods provided by retailers?

Retailers maintain a ready stock of goods for sale to consumers.

In which ways do retailers provide convenient location to the consumers?

Retail outlets are situated near residential areas and remain open for long hours. The consumers can buy the goods from the retailers at their convenience.

In what ways do retailers provide the consumers with wide choice?

Retailers stock wide variety of products. Consumers like to purchase everything under one roof. So, retailers stock products of different companies providing wide choice to consumers.

How do retailers provide home delivery to their consumers?

Without any extra charge, some retailers supply goods at home of consumers.

How is consumer education provided to the consumers?

When a new product comes in the market, retailer clearly explains the merits and uses of the product to the ultimate consumers.

What are the services provided to the wholesalers by retailers?

Retailers provide the following services to the wholesalers –

1. market information
2. help in distribution
3. large scale production
4. sell new products

How do retailers provide market information to the wholesalers?

Retailers supply valuable information to wholesalers about changes in tastes, fashion etc. of consumers.

How do retailers help in distribution of services to wholesalers?

Retailers relieve the manufacturers and wholesalers of the burden of collecting and executing a large number of small orders from various consumers.

In what ways is large scale production made possible by retailers?

Retailers help manufacturers to operate at a large scale.

How can retailers sell new products?

New products will be displayed in retail outlets in a attractive way so as to persuade consumers to buy these products.

Who act as a link between producers and consumers?

Both retailers and wholesalers act as a link between  producers and consumers in the chain of distribution of products. They are called middlemen as they come in the middle i.e. between the producers and the consumers in the chain of distribution of products.

What is the chain of distribution?

Producers -> Wholesalers -> Retailers -> Consumers

What do middleman do?

Middlemen provide useful services to both producers and consumers. For the producer, they free him of the complexities of arranging for transport, warehousing, financing and marketing of his produce to large extent. The responsibility of the producer gets limited to producing the product. Largely all efforts to sell and distribute the same is taken up by these middlemen. For the consumers too, these middlemen are beneficial as they make the products available at the place and time of convenience to them.

What is the role of wholesalers in the distribution of goods?

The wholesalers through their services offer a number of benefits to the products and retailers –

1. They save the time and effort of the producers and allow them to concentrate on production of the goods while distribution is taken care by the wholesalers.
2. They deal with goods in bulk and reap the benefits of economies of scale.
3. They provide goods in relatively small quantities to retailers and provide them with facility of credit purchase.
4. They provide information to the producers about the consumers preference, changing taste and fashion, market demand etc.
5. Wholesalers also bear the risk involved in holding of stock of goods and its transportation.

What is the role of retailers in the distribution of goods?

Retailers are engaged in selling the products to the end users or the consumers.

1. They cater to the demand of customers by providing a variety of products collected from different locations.
2. The retailers may offer credit facility to customers.
3. They also offer pre and after sales services and communicate to consumers the technique of usage of the products.
4. They act as salesmen of the product and pursuade buyers to purchase goods and services.
5. They provide information to the manufacturers or wholesalers about the feedback on consumers response to the product.

Do the services of middle men come free of cost?

The services provided by the middle men do not come free of cost. They charge their share of profit margin for the product, in return for the services they provide. Th is increases the sale price of the product considerably as compared to the cot incurred in producing it.

What are some of the problems that stem from middlemen coming in between the manufacturers and consumers?

Although middlemen prove to be the gel between manufacturers and consumers, there are several issues that do pop up because of them as well –

1. If there are too many middlemen between manufacturers and consumers, each charging his share of profit or commission, the ultimate consumer ends up paying a very high price for the goods.
2. Some middlemen indulge in unfair trade practices like hoarding and adulteration to increase their gains from the business.
3. They, at times, promote the sale of inferior quality goods and exploit the consumers to get a high profit margin for themselves.
4. Sometimes the transfer of goods from one middlemen to the other causes delay in the smooth flow of goods, instead of facilitating it.

Who is responsible for the risks in the business?

The middlemen do not bear risk such as loss due to strikes, lockouts, change in fashion and consumption habits. They have to be primarily borne by the producer.

What is the difference between wholesale trade and retail trade?

Following are the differences between whole sale trade and retail trade –

Basis	Wholesale trade	Retail trade
Number of items	Deals in a few items	Deals in a variety of items
Quantity of goods bought and sold	Large	Small
Source of purchase	Manufacturers	Wholesalers or producers
Main activity	Sells goods for resales	Sells goods for final use or consumption
Amount of capital required	Large	Small
Nature of relationship with producers or consumers	Direct link with the producers and indirect link with the consumers	Indirect link with the producers and direct link with the consumers
Location	Located in the same area along with other wholesalers dealing in similar products	Located near residential areas
Display	Does not require elaborate display of goods	Requires display of products attractively

How can the retailing business be classified as on the basis of size?

The retailing business can be classified on the basis of size as small scale, medium scale and large scale.

 

<dl

How can the retail trade be classified on the basis of ownership?

On the basis of ownership, it can be classified as sole proprietorship, partnership, cooperative society or just joint stock company.

How is retailing business classified on the basis of fixed place?

On this basis, the business can have two categories –

Itinerant Retailing

Fixed shop retailing

What is itinerant retailing?

Itineratnt retailing is the type of small-scale retail trade in which retailers move around and sell a variety of items directly to the consumers. They do not have a fixed shop where they can sell.

What are the different itinerant retailers that are present in the cities?

There are traders who sell their articles on fixex days at different market place. In villages these places are called haat in in towns they are called weekly bazars.

Are people selling door to door included in itinerant retailing?

Itinerant retailing includes persons selling products from door to door.

How are prices setlled in case of itinerant retailing?

In most cases, the prices are not fixed and mostly setlled through bargaining. In most cases, the items sold are not branded.

Where from do people sell in case of fixed shop retailing?

Here, the retailers sell goods and services from a fixed placed known as shop. They do not have to move from place to place to serve their customers.

Where are shops usually located?

Shops are usually located at market place or commercial areas or residential localities. These shops normally deal with a limited variety of goods.

On what basis are fixed shop retailing classified?

On the basis of volume of transaction or size of their operation, fixed shop retailing can be classified as –

• small scale fixed shop retailing
• large scale fixed shop retailing

Where can one find small scale fixed shop retailers?

In every locality, one can find fixed shop retailers dealing with goods and services on a small scale.

What do small scale fixed shop retailers deal with?

Small scale fixed shop retailers deal with limited variety and limited quantity of goods and cater to the needs of a local area.

What are the requirements of fixed shop retailers and under what category do they come?

Fixed shop retailers require less capital and provide goods to a limited number of customers. The grocery shops of our locality come under the category of small scale fixed shop retailing.

On the basis of the nature of goods they deal with, how are fixed shop retailers classified?

On the basis of nature of goods fixed shop retailers are clssified as –

• General store or Variety Store
• Single line store
• Speciality store
• Second hand goods shop

Explain general store or variety store?

General stores deal with a variety of items of general use. They sell products mostly required by people for their daily use. For example, in a variety store you can find different items like toiletry, hosiery, biscuits and snacks items, grocery, cosmetics, gift items and stationery. These retailers often make direct sale by cash only. However, for their regular customers may even give discounts, provide credit facility and also free home delivery of goods.

What are single line stores?

Single line stores deal with a specific line of goods. For example – medicine shops, bookshops, toy shops, ready made garment shops etc. These are all single line stores. They sell goods of different sixe, brands, designs, styles and quality of the same product line.

What are specialty stores?

Speciality stores deal with products of a specific brand or company. All varieties of any particular brand or manufacturer are made available in these stores. So, stores like Wooodland shoe shops where products starting from shoes to apparel produced by Woodland company are made available/

What are second hand goods shops?

Now-a-days in cities and shops there are even shops which sell second hand goods or used goods. These shops generally sell goods like books, furniture, clothes and other household items.

What are large scale retail trades?

Large scale retail trade is the type in which single type of goods or a variety of goods is made available to a large number of consumers either in a big shop under a single roof or in various shops at the convenience of customers or directly delivered at the place of the customers.

What are the types of large scale retail trade?

The types of large scale retail trade are –

• Departmental Stores
• Multiple Shops
• Super Market
• Consumer Cooperative Store
• Mail Order Retailing
• Franchise

what is a departmental store?

Departmental store is a large scale retail shop where a large variety of goods are sold in a single building.

How is a departmental store divided?

Departmental store is divided into a number of dpearments or sections. In each department specific types of goods like stationery items, books electronic goods, garments, jewellery etc are made available.

What are the the merits of departmental stores?

Departmental stores have the following merits –

1. They sell a large variety of goods to consumers, under one roof. So, it saves time and efforts of the customers.
2. Departmental stores offer wide variety of goods produced by different manufacturers.
3. They buy large volumes of goods, at a time directly from manufacturers, and get good amount of discount from them. They are able to reap the benefits of economies of large scale operations.
4. Departmental stores offer wide variety of goods produced by different manufacturers, and get good amount of discount from them. They are able to reap the benefits of economies of large scale operations.
5. Since, these stores are organized on a large scale basis, they can afford to employ efficient and competent staff to provide the best services.
6. Each department that is part of the departmental store in a way advertises for the other departments. While visiting one department customers are attracted to see and even buy the goods displayed in other departments.

What are the limitations of departmental stores?

Departmental stores come with the following limitations –

1. Large amount of capital investment is required to start and run a departmental store.
2. They are generally located at places far from residentail areas, so they are not very convenient for buying goods of daily use.
3. The operating cost of the departmental stores is veryhigh since it includes cost of location, decoration of building, salary of large number of employeesand provision of various facilities for the convenience of customers.
4. There is no direct contact between owners and customers in departmental stores. It is the employees of the store who interact with the customers. The owners do not get first hand information about the tastes, preferences likes and dislikes of the customers.

What are multiple shops?

Multiple shops are shops usually owned and run by big manufacturers or prodcuers. They open a number of branches at different localities in a city or in different cities and town in a country. These shops are also called as chain stores. Multiple shops deal with similar types of goods mostly of everday use e.g. shoes, textiles, watches automobile products etc. The price is uniform for similar items in all the shops.

Where are multiple shops usually located?

Multiple shops are usually located in the main market place or in busy shopping centres.

What are the merits of multiple shops?

Multiple shops offer following advantages to the buyer and seller –

1. All multiple shops are built alike, that helps customers to recognizse the shops easily. THey have similar window display, interior decoration of the shop and arrangement of the counter, furniture, sign boards.
2. They facilitate elimination of middlemen in the process of distribution.
3. These shops enjoy the benefits of large scale purchase or production of goods. Also, due to common advertisements these shops are able to save on the cost of advertising.
4. The customers can get the goods at a cheaper rate because of low operating cost and eliminataion of middlemen in the process of distribution.
5. Since, the customers get genuine and standarised goods directly from manufacturers, cahnces of duplication of goods and cheating does not arise in thse shops. Also, standard quality of unifrom price of products help in winning the confidence of customers.

What are the limitation of multiple shops?

Althought multiple shops come with their own advatages, following are some of the disadvatages of the multiple shops –

1. These shops deal in a limited variety of products and restric thte choice offered to customers.
2. Sales are made on cash basis only and the customer cannot avail of credit facilities from these shops.
3. Customers cannot bargain with sales person while buying the product. The p rices of the product are fixed by the head office and individual shops have no control over it.
4. Each of the multiple shops is generally managed by the branch managers and they strictly follow the instructios of the head office. Often, they donot take initiative or special interest in satisfying the customers.

What are the limitation of multiple shops?

Multiple shops have the following limitations =

1. These shops deal in a limited variety of products and restrict the choice offered to customers.
2. Sales are made on cash basis only and the customer cannot avail of credit facilities from these shops.
3. Customers cannot bargain with sales person while buying the product. The prices of the product are fixed by the head office and individual shops have no control over it.
4. Each of the multiple shops is generally managed by the branch managers and they strictly follow the instructions of the head office. OFten, they do not take initiative or special inteerest in satisfying the customers.

Happy Learning 🙂