Domestic trade


Domestic trade

Domestic trade, also known as internal trade or home trade, is the exchange of domestic goods within the boundaries of a country. This may be sub-divided into two categories, wholesale and retail. Wholesale trade is concerned with buying goods from manufacturers or dealers in large quantities and selling them in smaller quantities to others who may retailers or even consumers. Wholesale trade is undertaken by wholesale merchants or wholesale commission agents. Retail trade is concerned with the sale of goods in small quantities to consumers. This type of trade is taken care of by retailers. In actual practice, however, manufacturers and wholesalers may also undertake retail distribution of goods to bypass the intermediary retailer, by which they earn higher profits.

Contents

Importance and Role

The importance of domestic trade in a country is that it facilitates exchange of goods within the country. By doing this it also makes sure that factors of production reach to the right places so that the economy of the country can grow. By allowing all different types of goods and services to reach to all parts of the country it improves the standard of living of the residents of the country as well as the employment rate of the country. And it helps the growth of an industry by ensuring the availability of raw materials. It even facilitates foreign trade. Traders from outside the country will have to come in contact with internal traders, because its not easy to come directly into another country and get the required products.


Different-Types-of-Trade1.png

Wholesale trade

Wholesalers play a major role in working of domestic trade. One could even say that its the backbone of the domestic market. A wholesaler is one is directly in contact with the manufacturers but in indirect contact with the consumers. A wholesaler generally deals with one type of industry. e.g. machinery, textile, stationery. A wholesaler is not only into selling of products as its also involved in packaging, advertising, grading, and market research. They have their own go downs which saves the manufacturers from bothering about storage. They normally make cash payments from retailers and sometimes consumers themselves and give advance payments which benefits the manufacturers. They sell in smaller quantities to retailers, which refrains the retailers from requiring storage space. They do allow credit facilities to retailers at times.

Retail trade

A retailer is normally the final seller of a product. It makes its purchases made from Wholesalers and sales are made to the customers directly. Retailers do not have particularly have to be from one industry i.e. the can trade in a variety of products at the same time. It generally has purchases made by credit and sales made in cash. Sales as compared to wholesalers are made in small quantities.

References

[1]

  1. ^ [1] Difference between international and domestic trade

[1]

  1. ^ N.D. Kapoor & Bharat Bhushan, R. P. Maheshwari (1997). ISC Commerce. India: Pitambar Publishing,. pp. 199-278. ISBN 81-209-0447-8. 

[1]

  1. ^ [2] International Trade vs. Domestic Trade – Differences, Statistics & Potential Risk Factors

Wikimedia Foundation. 2010.

Look at other dictionaries:

  • domestic trade — Tradúzcase por comercio interior (igual que «home trade») …   Diccionario español de neologismos

  • domestic trade — buying and selling within a country …   English contemporary dictionary

  • Trade Credit Insurance — or Credit Insurance is an insurance policy and a risk management product offered by private insurance companies and governmental Export Credit Agencies to business entities wishing to protect their balance sheet asset, accounts receivable, from… …   Wikipedia

  • Domestic market — A domestic market is a financial market. Its trades are aimed toward a single market. A domestic market is also referred to as domestic trading. In domestic trading, a firm faces only one set of competitive, economic, and market issues and… …   Wikipedia

  • trade —    Wide ranging and intensive trade, especially foreign trade, was absolutely essential to the prosperity and success of the ancient Mesopotamian cultures. This was because Mesopotamia was and still is deficient in many important natural… …   Ancient Mesopotamia dictioary

  • trade — {{Roman}}I.{{/Roman}} noun 1 buying/selling of goods/services ADJECTIVE ▪ booming, brisk, burgeoning, expanding, flourishing, lively, roaring, thriving ▪ …   Collocations dictionary

  • Trade — This article is about the economic mechanism. For other uses, see Trade (disambiguation). Purchase redirects here. For other uses, see Purchase (disambiguation) Trader in Germany, 16th century …   Wikipedia

  • trade — tradable, tradeable, adj. tradeless, adj. /trayd/, n., v., traded, trading, adj. n. 1. the act or process of buying, selling, or exchanging commodities, at either wholesale or retail, within a country or between countries: domestic trade; foreign …   Universalium

  • domestic — domestically, adv. /deuh mes tik/, adj. 1. of or pertaining to the home, the household, household affairs, or the family: domestic pleasures. 2. devoted to home life or household affairs. 3. tame; domesticated. 4. of or pertaining to one s own or …   Universalium

  • trade — [[t]treɪd[/t]] n. v. trad•ed, trad•ing, adj. 1) the act or process of buying, selling, or exchanging commodities, at either wholesale or retail, within a country or between countries: domestic trade; foreign trade[/ex] 2) a purchase or sale;… …   From formal English to slang


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.