Domestic trade, different from

international trade International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. (see: World economy) In most countries, such trade represents a significant ...

, is the exchange of domestic goods within the boundaries of a country. This may be subdivided into two categories,

wholesale Wholesaling or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional or other professional business users; or to other wholesalers (wholesale businesses) and related subordinated services. In ...

and

retail Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and t ...

. Wholesale trade is concerned with buying goods from manufacturers or dealers or producers in large quantities and selling them in smaller quantities to others who may be retailers or even

consumer A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. T ...

s. Wholesale trade is undertaken by wholesale merchants or wholesale commission agents. Retail trade is concerned with the sale of goods in small quantities to consumers. This type of trade is taken care of by retailers. In actual practice, however, manufacturers and wholesalers may also undertake retail distribution of goods to bypass the intermediary retailer, by which they earn higher profits.

Importance and Role

The importance of domestic trade in a country is that it facilitates the exchange of goods within the country. By doing this it also makes sure that factors of production reach the right places so that the

economy An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the ...

of the country can grow. Allowing all different types of goods and services to reach all parts of the country improves the

standard of living Standard of living is the level of income, comforts and services available, generally applied to a society or location, rather than to an individual. Standard of living is relevant because it is considered to contribute to an individual's quality ...

of the residents of the country as well as the

employment rate The Organisation for Economic Co-operation and Development defines the employment rate as the employment-to-population ratio. This is a statistical ratio that measures the proportion of a country's working age population (statistics are often ...

of the country. And it helps the growth of the industry by ensuring the availability of

raw material A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished goods, energy, or intermediate materials that are feedstock for future finished products. As feedst ...

s. Traders from outside the country will have to come in contact with internal traders because it is not easy to come directly into another country and get the required products. Compared to international trade, domestic trades are less costly and risky.

Wholesale trade

Wholesalers play a major role in the working of domestic trade. One could even say that it is the backbone of the domestic market. A wholesaler is directly in contact with the manufacturers but in indirect contact with the consumers. A wholesaler generally deals with one type of industry. e.g.

machinery A machine is a physical system using power to apply forces and control movement to perform an action. The term is commonly applied to artificial devices, such as those employing engines or motors, but also to natural biological macromolecule ...

textile Textile is an umbrella term that includes various fiber-based materials, including fibers, yarns, filaments, threads, different fabric types, etc. At first, the word "textiles" only referred to woven fabrics. However, weaving is not the ...

stationery Stationery refers to commercially manufactured writing materials, including cut paper, envelopes, writing implements, continuous form paper, and other office supplies. Stationery includes materials to be written on by hand (e.g., letter paper) ...

. A wholesaler is not only into selling products as it is also involved in

Packaging Packaging is the science, art and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of designing, evaluating, and producing packages. Packaging can be described as a co ...

advertising Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...

, grading, and

market research Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness. Mark ...

. They have their own go downs which save the manufacturers from bothering about storage. They normally make cash payments from retailers and sometimes consumers themselves and give advance payments which benefits the manufacturers. They sell in smaller quantities to retailers, which refrains the retailers from requiring storage space. They do allow credit facilities to retailers at times. For example, we see that Bhija one of the great wholesalers usually gets information documents from retailers.

Retail trade

A retailer is normally the final seller of a product. It makes its purchases made from Wholesalers and sales are made to the customers directly. Retailers do not particularly have to be from one industry i.e.v they can trade in a variety of products at the same time. It generally has purchases made by credit and sales made in cash. Sales as compared to wholesalers are made in small quantities. retailers carry out their trade at places where consumers live

References

Difference between international and domestic trade {{Authority control Trade

Trade Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. An early form of trade, barter, saw the direct excha ...