Trade refers to buying and selling of goods and services with the objective of earning profit on the basis of geographical location of buyers and sellers. It can be classified into two categories (i) internal trade; and (ii) external trade.
Internal trade: Buying and selling of goods and services within the boundaries of a nation are referred to as internal trade. No custom duties or import duties are levied on such trade as goods are part of domestic production and are meant for domestic consumption. Internal trade can be categorised into two broad categories (i) wholesale trade; and (ii) retailing trade.
Wholesale trade: Purchase and sale of goods and services in large quantities for the purposes of resale or intermediate use is referred to as wholesale trade. Wholesalers perform a number of functions in the process of distribution of goods and services and provide valuable services to manufacturers and retailers.
Retail trade: A retailer is a business enterprise that is engaged in the sale of goods and services directly to the ultimate consumers.
Types of retail trade: Retail trade can be classified into different types according to their size, type of ownership, on the basis of merchandise handled and whether they have fixed place of business or not. Retailers can be categorised as (i) itinerant retailers; and (ii) fixed shop retailers.
Departmental stores: A departmental store is a large establishment offering a wide variety of products, classified into well-designed departments, aimed at satisfying practically every customer’s need under one roof.
Chain stores or multiple shops: These shops are networks of retail shops that are owned and operated by manufacturers or intermediaries dealing in standardised and branded consumer products having rapid sales turnover.
Mail order houses: Mail order houses are retail outlets that sell their merchandise through mail, without any direct personal contact with the buyers.
Consumer cooperative stores: A consumer cooperative store is an organisation owned managed and controlled by consumers themselves formed with the objective of reducing the number of middlemen and thereby providing services to members.
Super markets: A super market is a large retailing business unit selling wide variety of consumer goods on the basis of low margin appeal, wide variety and assortment and heavy emphasis on merchandising appeal.
Vending Machines: Vending machines are proving useful in selling pre-packed brands of low priced products which have high turnover and which are uniform in size and weight.