Trade And Its Types

dock-441990_960_720Trade will refer to selling and buying of products and services for money. It will involve the exchange or transfer of goods and services. It is performed not only for the sake of earning profits but also for giving services to the consumers. And since it enhances the standard of living of consumers, trade is indeed considered a significant social activity.

2 Main Types Of Trade

Internal Trade – This is also known as Home trade, which is conducted in the political and geographical boundaries of a country. This can be performed at local, regional or national level. It can further be sub-divided into 2 groups – Wholesale Trade and Retail Trade. Wholesale trade will involve buying in large quantities from manufacturers and selling in lots to retailers. Retail trade, on the other hand, will involve buying and selling in small quantities.

External Trade – This is otherwise known as Foreign trade, which refers to selling and buying between 2 or more countries. It can further be subdivided into 3 groups – Export, Import and Entrepot. Export trade happens when a trader from home country will sell his products to a trader in another country. But if a trader in home country gets goods from a trader in another country, it is referred to as import trade. Entrepot trade, on the other hand, happens when products are imported from one country and then re-exported after some processing. In other words, this is otherwise known as re-export of processed imported goods.

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