Trade involves the transfer of goods and services from one person to another person with the exchange of money. Economics considers trade as a separate market in the corporate world. In the early years, about the mid-80s trade is the process of direct interchange of products and services from producer to consumer.
But now in the modern and global era, this process is expanded and involved a number of peoples in it. Initially, products and services are first delivered to the wholesaler in huge quantity; from this, it distributes to retailers and at last, reaches the actual consumer of the product. Every person involving in this exchange charge differently and is responsible for delivering desire products to consumers on time.
Trade is an important part of human life. It’s not conducted only to earn money but also to fulfill the requirements and needs of a product consumer. Trade is a cycle that makes an easy supply of different and innovative product range in every region of the world.
From trade a person from west can taste the spices of Asia and Asian people can enjoy the ease of technologies introduced by west. Trade make living standards of human advance and now human are getting addicted to it.
Type of Trade
There are two types of trades. Which are
- Internal and domestic trade
- External and foreign trade.
Internal trade is home trade. It is conducted between different regions and geographical locations of the same country. It helps to maintain a level of coordination and exchange of goods between every city of the state.
Internal trade is subdivided as
- Wholesale trade
- Retail trade
It is the process of buying products in huge quality from manufactures and then distribute to retailor so that they sell it to consumers. Wholesalers are used to supplying the product to a retailer since manufacturing and production are happening. wholesalers are the middle man between retailers and manufacturers because companies can’t sell their products direct to consumers. There are specific charges of wholesalers that depend upon the quantity and service of the product.
In this, retailer buy a small number of goods from wholesalers and sell it to the end consumers. It establishes the link between wholesalers and consumers. Also, it is the last step to make the product available for consumers to use. There are two types of retailor i.e., large and small retailers.
External trade is the process of selling or buying products and services from one country to another. It is also called foreign trade. It has no boundary, anyone from the globe can buy and sell anything to any region and state of the world. It makes business global and makes the easy availability of every product for the whole world. There are some national and international limitation and laws for external trade which save traders from any fraud.
External trade is further divided into three sub-trades.
- Export trade
- Import trade
- Entrepot trade
When trading occurs between the trader of one country and the trader of another country by selling any product it is called export trade. For example, traders in America sell any product to the trader in Germany.
When a trader of one country buys any goods from the trader of any other country called import trade. For example, traders located in England buy any products from traders in America to sell it in its region.
When a trader of one country purchases any product and goods from the trader of any other country and makes some changes and integration in it for reselling this product to any other country is called entrepot trade.
For example, the trader in America purchases any spare parts, machinery, and raw material from Japan and Russia and then restructure it to make a new product and sell it to other countries.
Trade is the process of selling and buying goods and services from one person to another. Trade can take place both nationally and internationally. It makes the life of humans easy by making the easy accessibility & availability of every technology and advanced product for everyone. Trade also helps to raise the economy of countries and has a direct effect on GDP.