What is Trade After All?
“Trade is related to the purchase and sale of goods and services. It may be called the process of taking goods from the source of production or place of procurement to the consumers. ”
Human beings need different kinds of products for their survival. All these products cannot be produced at a single place. Their sale and exchange thus becomes a primary necessity. The division of commerce that deals with the sale and exchange of different commodities is called trade.Trade is related to the purchase and sale of goods and services. It may be called the process of taking goods from the source of production or place of procurement to the consumers.
It is not possible for the producers to come in direct contact with the users. There is a need of some people who can undertake the job of taking goods from the producers and providing them to those who need them.
The persons who take up this work are known as middlemen. They are intermediaries between the producers and the ultimate users. These people help in the development of the trade to a large extent.
Now, trade can be classified into different categories. First is the internal trade. It is also known as home trade. It is said to take place when the purchase and sale of goods and services is from inside the country.
Similarly, when the internal trade is limited only to a particular area, it is known as local trade. Trade involving vegetables, milk, bread etc. comes under this category. The goods traded in the local market are generally perishable in nature.
Let’s now come to a state. In any particular state or province of a country, the goods are to be sent throughout the state. These goods are produced according to the needs, requirements, and customs of a particular state. This type of trade that is conducted throughout the country it is known as inter-state trade. The goods are durable in nature and can be stocked for a longer period like textile, kerosene, petrol etc.
When trade takes place between two countries, it is called foreign or external trade. The help of different agencies is required in such a trade to overcome the hindrances of place, time, risk, and exchanges. It also requires the permission of respective countries as regards the varying rules and regulations.
We can also distinguish between wholesale trade and retail trade. In the case of wholesale trade, goods are purchased in large quantity and are sold to retailers. A wholesaler is a link between producers and retailers.
Author - DeeKay
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