Chapter 10 : Internal Trade Business Studies

1. What is meant by internal trade?


Buying and selling of goods and services within the boundaries of a nation are referred to as internal trade. Purchases of goods from a local shop, a mall or an exhibition are all examples of internal trade. No custom duty or import duty is levied on these goods and services. It can be classified into two broad categories: wholesale trade and retailing trade.

2. Specify the characteristics of fixed shop retailers.


The characteristics of fixed shop retailers are:
→ They have greater resources and operate at a relatively large scale as compared with the itinerant traders.
→ These retailers deal in different products, including consumer durables as well as non-durables.
→ They have greater credibility in the minds of customers.
→ They are in a position to provide greater services to the customers such as home delivery, repairs, credit facilities etc.

3. What purpose is served by wholesalers providing warehousing facilities?


Two purposes are served by wholesalers providing warehousing facilities in following ways: 

→ Wholesalers reduces the burden of manufacturers of providing for storage facilities for the finished products.

→ Warehousing by wholesalers also relieves the retailers of the work of collecting goods from several producers and keeping big inventory of the same for maintaining adequate stock of varied commodities for the customers.


4. How does market information provided by the wholesalers benefit the manufacturers?


As the wholesalers are in direct contact with the retailers, they provide information and advice the manufacturers about various aspects including customer’s tastes and preferences, market conditions, competitive activities and the features preferred by the buyers. This information helps manufacturers to cater to the changing needs of consumers.

5. How does the wholesaler help the manufacturer in availing the economies of scale?


Wholesalers collect small orders from a number of retailers and pass on the pool of such orders to the manufacturers and make purchases in bulk quantities. This enables the producers to undertake production on a large scale and take advantage of the economies of scale.

6. Distinguish between single line stores and speciality stores. Can you identify such stores in your locality?


Single-line stores

Speciality stores

These are small shops that deal in only one product for example, garments or electronics. These stores deal only in a particular type of product from a selected product line for example, men’s clothing.
These stores offer a wide variety of the product. These stores generally sell all the brands of the product in which they specialise.
For example: If a store that deals in garments will have a wide variety of clothes in all sizes for men, women and children. For example, if a store specializes in men’s clothing, then it will have all the brands of men’s garments.

On the basis of these features, we can identify the different types of stores in a locality whether they are single-line stores or speciality stores.