Chapter 10 Flashcards
What is internal trade ?
Trade that takes place within a country is called internal trade
What is external trade ?
Trade between two or more countries is known as external trade
No customs or import duty is levied on what goods ?
goods that are part of domestic production and are meant for domestic consumption
What can internal trade be classified into ?
- Wholesale trade
- Retail trade
Define wholesale trade
purchase and sales of goods and services in large amounts for the purpose of resale or intermediate use is referred to as wholesale trade
Define retail trade ?
purchase and sales of goods in relatively small quantities, generally to the ultimate consumers is referred to as retail trade
Who do wholesalers provide services to
- to manufacturers
- to retailers
What are the services to manufacturers by wholesalers (7)
- Facilitate large scale production
- Bearing risks
- Financial assistance
- Expert advice
- Help in marketing function
- Facilitate production continuity
- Storage
Explain the function : (wholesalers to manufacturers) ; facilitate large scale production
Wholesalers collect small orders from retailers pool them and then help manufacturers produce in whole and let them take advantage of economies of scale
Explain the function : (wholesalers to manufacturers) ; Bearing risks
Wholesalers store the goods in their own warehouses therefore bearing the risk of theft, fire and etc…
Explain the function : (wholesalers to manufacturers) ; Financial assistance
Wholesalers provide financial assistance by buying in cash payment which means manufacturers will have more working capital to keep producing goods
Explain the function : (wholesalers to manufacturers) ; Expert advice
Since the wholesalers are in direct contact with the retailers who know market demand and informations, wholesalers educate the manufacturers about the consumer preferences
Explain the function : (wholesalers to manufacturers) ; facilitate production continuity
Wholesalers help in production continuity by one making cash purchases and also by making them he time they are done producing and store them in their own warehouses helping manufacturers to continue producing
Explain the function : (wholesalers to manufacturers) ; help in marketing function
Wholesalers take care of the distribution of the goods that manufacturers make in wide geographical areas allowing marketing of their goods in various places
Explain the function : (wholesalers to manufacturers) ; Storage
Wholesalers store the goods on their own warehouses and reduce the manufacturers burden of providing a space to store them
What are the services to retailers by wholesalers (5)
- Availability of goods
- Marketing support
- Grant of credit
- Specialised knowledge
- Risk sharing
Explain the function : (wholesalers to Retailers ) ; Availability of goods
Wholesalers keep goods ready for the use of retailers so that the retailers can re stock them any time they need it
Explain the function : (wholesalers to Retailers ) ; Marketing support
The wholesalers carry out various marketing activities which help gain popularity of the product and help the retailers sell these products
Explain the function : (wholesalers to Retailers ) ; Grant of credit
Wholesalers grant credit to retailers allowing them to pay slower and have more cash in flow
Explain the function : (wholesalers to Retailers ) ; Specialised knowledge
Wholesalers have specialised knowledge about the various goods in a line of product and they can inform retailers on how to decorate it and sell it
Explain the function : (wholesalers to Retailers ) ; Risk sharing
Wholesalers buy in bulk but they sell in small quantities so retailers can avoid the risks of storage and those associated to it like theft risk, fire risk and etc…
Who represent the final stage of distribution
Retailers as they get the goods transferred from the manufacturers to the ultimate consumer
What are the services to manufacturers/ wholesalers by retailers (5)
- Help in distribution of goods
- Personal selling
- Enabling large scale production
- collecting market information
- Help in promotion
Explain the function : (Retailers to wholesalers/ manufacturers) ; Help in distribution of goods
Retailers make the produced goods available to the consumers by selling them in small quantities in various geographical locations