SUBJECT: BUSINESS STUDIES
CLASS: JSS 2
DEFINITION OF TRADE
Trade is defined as the exchange of goods and services between buyers and sellers at an agreed price. It is the buying and selling of goods and services at an agreed price.
When goods are handed over to the buyers and there is exchange of ownership, the process of handing over the goods is called delivery. Trade is broadly classified into home trade and foreign trade. However buying and selling takes place very often in a market.
IMPORTANCE OF TRADE
FORMS OF TRADE
Home trade is the buying and selling of goods and services within the boundary of a country. For example, a yam trader at Onitsha selling to her customer in Lagos.
Home trade can also be called domestic trade or internal trade or national trade. It can be divided into two:
Wholesale trade should not be confused with a wholesaler. A wholesaler is the trader who buys goods and services in large quantities from the producer to sell in small quantities to the retailer. Wholesale trade is the process or system of buying in large quantities from the producer and selling in small quantities to the retailer. However a retailer buys in small quantities to sell to the public.
A retailer should not be confused with retail trade. A retailer is a trader who buys goods in small quantities from the wholesaler and sells in units to the consumer. However, retail trade is the process of buying in small quantity from the wholesaler and selling in bits or units to consumers.
Foreign trade is the selling of goods and services between one country and another. Example of this trade could be between Nigeria and Germany. It can also be called external trade or international trade and it is divided into two types namely:
i Import trade: This is the process of buying from other countries. Examples includes importation of cars, rice etc. A person or company engaging in this type of trade is called an Importer.
iii Entrepot trade: This is the re-exporting of goods already brought into a country from another country without further processing or transformation For example a company buying goods from a foreign country and selling it to another foreign country..
DIVISION OF TRADE
Home Trade Foreign Trade
Wholesale Trade Retail Trade Import Trade Export Trade Entrepot
(a) home trade (b) foreign trade (c) entrepot trade (d) local trade.
(a) international trade (b) home trade (c) mixed trade (d) entrepot trade.
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