Trade is that branch of commerce which is concerned with the sale, transfer or exchange of goods and services. It involves the buying and selling of goods and services. Trade is the nucleus of commerce because all commercial services like transportation, storage, insurance, banking, packaging, advertising, etc. revolve around trade. The superstructure of commerce is built upon the foundation of trade. Trade is of the following types :
Internal or Home Trade : It is concerned with the buying and selling of goods within the boundaries of a country. Payment for the goods sold is made in national currency either in cash or through the banking system. Such trade is also known as domestic trade or inland trade. Internal trade may be further classified into two categories as follows :
a) Wholesale Trade : It refers to the purchase and sale of goods of a specific verity in bulk. A wholesaler buys goods in large quantities directly from manufacturer (s) and sells them in comparatively small quantities to the retailers. Wholesale trade constitutes a link between the producers and the retailers.
b) Retail Trade : It involves, the sale of goods to the ultimate consumers. A retailer buys goods from wholesalers or manufacturers and sells them to the final consumers. He serves as the last link in the chain of distribution.
International or Foreign Trade : It consists of the exchange of goods and services between persons or organizations operating in two or more countries. International trade involves the use of foreign currency (known as foreign exchange) and international means of transport. International trade may be further classified into the following categories.
a) Import Trade : It involves purchase of goods from foreign countries for use in the domestic market.
b) Export Trade : It is concerned with the sale of domestic goods to foreign buyers or in foreign markets.
Entrepot Trade : Entrepot or re – export them. For instance, India may buy wheat from Australia to supply them same to Bangladesh.