BS 11 Chapter-9 Internal Trade

INTERNAL
TRADE
What is Trade?
Trade refers to buying and selling of goods and
services with the objective of earning profit.
What is Internal Trade?

Internal trade refers to buying and selling of goods
and services within the boundaries of a nation.
There are two types of Internal Trade :-

1) Wholesale trade
2) Retail trade
What is Wholesale Trade?
Wholesale trade refers to buying and selling of goods and
services in large quantities for the purpose of resale or intermediate
use.
Services provided by Wholesalers:
1)Services to Manufacturers
2)Services to Retailers
Services to Manufacturers:
1.They enable the manufacturers to gain the benefit of large scale

production.
2. They bear the risk on behalf of manufactures like of risk of fall in

prices, theft, fire, etc.
3. They provide financial assistance to the manufacturers.
4) They provide expert advice to the manufacturers related to customer’s

tastes and preferences.
5) They enable the manufacturers to get relieved from marketing
activities.
6) They provide storage and warehousing services to the manufacturers.
Services to Retailers:
1.They make the goods readily available to the retailers.

2.They undertake various marketing activities on behalf of Retailers.
3.They sell goods to the retailers on credit basis, thereby, providing them
financial assistance.
4) They pass on the benefit of their specialized knowledge about the
products to the Retailers.
5) They share the risk of storage, obsolescence and reduction in prices
with the Retailers.
What is Retail Trade?
Retail Trade is that branch of
business which is related to
sale of goods and services to
the ultimate consumers for
their personal use.
Services provided by Retailers
1)Services to
Manufacturers and
Wholesalers
2)Services to Consumers
Services to Manufacturers and Wholesalers
1) They provide help in the distribution of

products to the consumers scattered over a
large geographical area.
2) They undertake personal selling efforts and
relieve the manufacturers from this activity.
3) They enable the manufacturers and
wholesalers to operate at large scale
4) They collect market
information about the tastes
and preferences of consumers.
5) They participate in the
promotional activities of the
business.
Services to Consumers
1) They ensure regular availability of products
to the consumers.
2) They provide information about the arrival
and special features of the products to the
consumers.
3) They provide convenience to the
customers in buying products of their
requirements.
4) They enable the customers to
make their choice out of a
wide selection of goods.
5) They provide after sale
services to the consumers.
6) They provide credit facilities to
the regular buyers.
What are Departmental Stores?
A Departmental Store is a large
establishment offering a wide variety
of products, classified into well
defined departments, aimed at
satisfying practically every customer’s
need under one roof.
Salient features of a Departmental Store
1)They provide all facilities under one
roof.
2)They are generally located at a
central place.
3)They are generally formed as a
Joint Stock company.
4)They combine both the
functions of retailing and
warehousing.
5)They have centralized
purchasing arrangements.
What is a Chain Store?
Chain Stores are networks of
retail shops that are owned and
operated by manufacturers or
intermediaries.
Salient features of Chain Stores
1)They are located in fairly populous
localities.
2)The purchase of goods is
centralized.
3)Each retail shop is under direct
supervision of a branch manager.
4)All the branches are controlled by
the Head Office.
5)The prices of goods in such shops
are fixed and sales are cash basis.
6)The shops are supervised by
inspectors appointed by head office.
Difference between
Departmental Stores
and Chain Stores
Basis Departmental Chain Stores
Stores
Location Located at a central Can be located
place anywhere
Range of Deal in wide variety Deal in specified
products of products range of products.
Services offered Aim at providing Provide limited
maximum services services
Pricing Pricing policy is Pricing policy is fixed
flexible
Class of High income group All class of
customers customers
Credit facilities Provide Credit No Credit facilities
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INTERNAL

What is Internal Trade?

There are two types of Internal Trade :-

Services provided by Wholesalers:

1.They enable the manufacturers to gain the benefit of large scale

2. They bear the risk on behalf of manufactures like of risk of fall in

3. They provide financial assistance to the manufacturers.

4) They provide expert advice to the manufacturers related to customer’s

1.They make the goods readily available to the retailers.

1) They provide help in the distribution of

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