Buying and selling of commodities and services within the country is referred to as internal trade. Whether the products are bought from a neighborhood store in a location or a central market or a departmental store or a mall or even from any door to- door salesperson or from an exhibition, all these are examples of internal trade as the commodities are bought from an individual or establishment within a country. No custom duty or import duty is levied on this type of trade as commodities are a part of domestic production and are intended for domestic consumption. Normally, payment is made in the legal tender of the country or any other appropriate currency. Internal trades are categorized into two broad groups' viz.,
- Wholesale trade and
- Retail trade.
As discussed earlier, wholesale trade refers to purchase and sale of commodities and services in huge quantities for the purpose of resale or intermediate use. Wholesaling is connected to the activities of those people or establishments which sell to retailers and other merchants, and/or to industrial institutional and commercial consumers but who don't sell in significant amount to final consumers. They not only enable the producers to reach large number of consumers spread over a wide location (through retailers) but carry out different functions in the process of distribution of commodities and services.
Services of Wholesalers
Wholesalers present numerous services to the manufacturers and the retailers and also provide a lot of help in the distribution of commodities and services. By making the products available at a location where these are required and at a time when these are required for Consumption or use, the wholesalers give both time and place utility. The variety of services by the wholesalers to manufacturers and retailers. All these points were discussed in detail in this chapter for the benefit of the students
A retail trade is a business enterprise that carries out the sale of commodities and services directly to the final consumers. He/she usually purchases commodities in large scale from wholesale merchants and sells them in small scales to the final consumers. He/she represents the last stage in the distribution where products move from the hands of traders to ultimate consumers or users. It is, thus, that branch of business which deals with the sale of commodities and services to the final consumers, for their personal, non-business use.
Services of Retailers
Retailers form an important link between the manufacturers and final customers in the distribution of commodities and services in this process. They present useful services to the users, wholesale merchants and producers.
Types of Retailing Trade
We have various types of retailers in our country. For better understanding, its appropriate, to classify them into certain usual categories. Different categories have been used by experts to classify retailers into various types like for example, on the basis of 'size of business', they may be classified into large, medium and small retailers. In case of basis of 'type of ownership', they are grouped into 'sole trader', 'partnership firm', 'cooperative store' and 'company'. Another common base of categorization is whether or not they have a fixed location of business like:
- Itinerant retailers, and
- Fixed shop retailers
Itinerant retailers are traders who do not have a standard place of business from which they can operate. They keep moving with their shops from one location to another, in search of consumers
Fixed Shop Retailers
Fixed shop retailing is the very usual type of retailing in the market place. As the name suggests, they maintain permanent establishment to sell their products and hence they do not move from place to place to serve their customers.
The further classification of these shops were also discussed in this chapter in detail along with their merits and demerits.
Mail Order Houses
These are the retail outlets that carry out sales of their goods through mail. There is normally no direct personal contact between the purchasers and the vendors in this form of trading.
Consumer Cooperative Store
A consumer cooperative stores are organizations which are owned, handled and managed by consumers themselves. The objective of consumer cooperative stores is to lessen the number of middlemen who increase the cost of production, and hence present service to the members. These stores normally purchase in a large scale, directly from producers or wholesalers and sell them to the consumers at reasonable prices. Because the middleman are eliminated or reduced, the members get good quality goods at cheaper prices.
A super market is a big retailing business unit selling large variety of consumer products on the basis of low margin appeal, large variety and assortment, self-service and heavy emphasis on merchandising appeal. The products traded are normally food commodities and other low priced, branded and widely used consumer goods such as grocery, utensils, clothes, electronic appliances, household goods, and medicines. Super markets are normally located at the main shopping areas. Products are kept on racks with properly labeled price and quality tags in these stores.
These type of machines are the latest revolution in marketing techniques. Coin operated vending machines prove to be useful in selling several things like hot beverages, platform tickets, milk, soft drinks, chocolates, newspaper, etc., in a lot of countries. Other than some of these products mentioned above, the recent area in which this concept is getting popular in many parts of our country (particularly in the urban areas) is the case of Automated Teller machines (ATM) in the banking service. As the name suggests, these machines have totally changed the ideology of banking and made it possible to withdraw money at any hour without visiting any branch of a bank. They can be useful for selling pre-packed brands of less rated goods which have a large turnover and which are uniform in size and weight.
Role of Indian Chambers of Commerce and Industry in Promotion of Internal Trade
The Chambers of Commerce and Industry was started as an association of business and industrial houses to develop and protect their common interest and aims. Lot of such chambers have been established and are present in our country like for example, ASSOCHAM, Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (FICCI). Such chambers of commerce call themselves as the national guardians of trade, commerce and industry. The Indian Chambers of Commerce and Industry play a catalytic role to strengthen internal trade to make it an crucial part of overall economic activity. These Chambers interact with the government at various levels to reorient or reorder policies which reduce hindrances, increase interstate movement of goods, introduce transparency and remove multiple layers of inspection and bureaucratic hurdles. And also these chambers also intend at erecting sound infrastructure and simplifying and harmonising the tax structures.