Forms of Trade

Task 1. Expand your vocabulary. ► Vocabulary Bank p. 300

\JTask 2. Read and translate the text.

Types of Trade

Trade is the transfer of ownership of goods and services from one person or entity to another. It means exchange of goods between individuals and groups for money.

Trade is sometimes loosely called commerce or financial transaction or barter. Commerce includes all those activities, which are related to the transfer of goods from the place of production to the final consumers, at the right time, at the right place, in the right quantity and at the right price. Commerce can be divided into two parts. Those are trade and aids to trade. As you can see from the chart trade is of two types - home trade and foreign trade:

Different Types of Trade

Foreign trade crosses national boundaries and is done between countries. It is also called as International trade, External trade or Inter- Regional trade. It consists of imports, exports and entrepot. The inflow of goods in a courtly is called import trade whereas outflow of goods from a country is called export trade. Many times goods are imported for the purpose of re-export after some processing operations. This is called

entrepot trade. Foreign trade basically takes place for mutual satisfaction of wants and utilities of resources.

Home trade does not involve the transfer of goods and services that cross national boundaries and is done within the borders of the country. It is known also as Internal trade or National trade. It is the local buying and selling of goods and services.

Home trade is of two types:

• Purchase of goods in large quantities from producers and their sale to the retailers is known as wholesale trade.

• Purchase of goods from the wholesaler and their sale to the ultimate consumer is known as retail trade.

Wholesale refers to a type of business that buys products in bulk from one or more manufacturers and sells them at wholesale prices (typically lower prices) to business and institutional customers - such as other professional business users, retailers, industrial, commercial, institutional, government agencies or hospitals or other wholesalers, - who use the products in their own day-to-day operations. When you buy wholesale, you are usually buying for the purpose of reselling.

Retailing is nothing but transaction of goods between the seller and the end user as a single unit (piece) or in small quantities to satisfy the needs of the individual and for his direct consumption. Retail trade consists of the sale of goods or merchandise from a very fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing includes all activities involved in selling, renting, and providing goods, and services to ultimate consumers for personal, family, or household use.

Retailers are at the end of the supply chain. Marketers see retailing as part of their overall distribution strategy. Retail strategies are combination of one or more of the 6 P’s of retail referred as Retailing Mix. The 6 P’s are product, place, price, promotion, process, and people. Retailing mix helps a business define its strategy and carry out operations according to its goals and make your business more profitable than your competitors.

Wholesalers and retailers are in the business of re-selling goods that have been purchased from suppliers. They bring goods produced in the area, or imported from other regions and countries, to the marketplace where they can be purchased by consumers.

Task 3. Answer the questions.

/

1. What is trade?

2. What does commerce include?

3. Is commerce divided into three parts?

4. What are the types of trade?

5. What are the forms of foreign trade?

6. Does home trade involve the transfer of goods and services that cross national boundaries?

7. How many types of home trade do you know? What are they?

8. What type of business does wholesale refer to?

9. What does retail trade consist of?

10. What do wholesalers and retailers do?

Task 4. Give the English equivalents for the following word combinations. Use them in the sentences of your own.

• o6MiH TOBapiB • BiflTiK TOBapiB 3 Kpa'lHH

• 30BHiuiHH TopriBJiH • npmuiHB TOBapiB y Kpa'my

• BHyrpiuiHH TopriBJifl • 6e3nocepeAne cnoacHBaHHH

• KimjeBHH cno>KHBaH • 3arajibHi CTpaTerii po3no.ai.ny

• eKcnopTHa TopriBJia • .nonoMDKHi 3aco6n A-na TopriBJii

• (JjiHaHCOBa onepauia • KynyBa™ 3 mctokd nepenpoaaacy

• pe-eKcnopraa TopriBJia • KynyBara npoAyKuiio bcjihkhmh

napTiflMH

Task 5. Read the text given below. Decide which heading (1-6) is appropriate to the statements (A-G).

1. Advertisement 2. Warehousing 3. Insurance

4. Agents 5. Banking 6. Transport

Aids to Trade

The activities that facilitate the trade are known as aids to trade. It has follow types:

1. : Commercial banks play an important role in financing various

activities of trade.

2. : It is another important aid to trade. The risk of damage of