Internal Trade 


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

Domestic trade is also known as internal trade or home trade. It is conducted within the political and geographical boundaries of a country. It can be at local level, regional level or national level. Hence trade carried on among traders of Delhi, Mumbai, etc. is called home trade. It may be sub-divided into two categories, wholesale and retail.
Wholesale Trade 
It involves buying in large quantities from producers or manufacturers and selling in lots to retailers for resale to consumers. The wholesaler is a link between manufacturer and retailer. A wholesaler occupies prominent position since manufacturers as well as retailers both are dependent upon him. Wholesaler act as a intermediary between producers and retailers.
Characteristics of wholesale trade
Following are the characteristics of wholesale trade :
(a) The wholesaler generally deals in one or few variety of items. He is a specialist trader in a particular line e.g., machinery, textiles, medicines etc.
(b) Wholesalers buy goods from the manufacturers and producers in bulk and sell them to the retailers and sometimes to consumers directly.
(c) Wholesale trade requires a large amount of capital to be invested. This is because purchases are made in bulk, advances are given to manufacturers and the goods are generally sold on credit. Besides it also requires large storage space.
(d) Generally people who engaged in wholesale trading of similar goods have their business premises located in the same area for the convenience of the retailers. For example, wholesale grain market, wholesale paper market etc. These are wholesale markets dealing in one particular product. (e) Besides selling, wholesale traders are also involved in some other activities like packaging, grading, advertising, market research, etc.
 Retail Trade :
 It involves buying in smaller lots from the wholesalers and selling in very small quantities to the consumers for personal use. The retailer is the last link in the chain of distribution. He establishes a link between wholesalers and consumers. There are different types of retailers small as well as large. Small scale retailers includes hawkers, pedlars, general shops, etc.
Characteristics of Retail Trade
Following are the characteristics of retail trade: (a) Retail trade generally involves dealing in a variety of items. (b) A retailer makes purchases from producers or wholesalers in bulk for sale to the consumers in small quantities. (c) Retail trade is normally carried on in or near the main market area. (d) Generally retail trade involves buying on credit from wholesalers and selling for cash to consumers. (e) A retailer has indirect relation with the manufacturer (through wholesalers) but a direct link with the consumers. # We can classify the retailing business on the basis of size as small scale, medium scale and large scales. On the basis of forms of ownership, it may be sole proprietorship, partnership, cooperative society or joint stock company. But the most common way of classifying retailing business is whether they have any fixed place of business or not. On this basis, one can have two categories of retailing business :
1. Itinerant Retailing
2. Fixed shop Retailing
Itinerant Retailing Itinerant retailing is a 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.
Fixed Shop Retailers sell goods and services from a fixed place known as ‘shop’. They do not have to move from place to place to serve their customers. These shops are usually located at market places or commercial areas or near residential localities.

Friday, 18th Dec 2015, 04:50:50 AM

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