TRADE

• Trade is a basic economic concept that involves multiple parties participating in the voluntary negotiation and then the exchange of one’s goods and services for desired goods and services that someone else possesses
• Trade vs Commerce

  • Trade involves buying, selling, and exchanging in return for money or money’s worth
  • Commerce refers not only to buying and selling of goods but includes other activities such as transport, insurance, warehousing, banking, and advertising which help in buying and selling of goods
• Types of trade

  • Domestic trade
  • International trade
• Participants in trade

  • Producer
  • Wholesaler
  • Agent
  • Retailer
  • Consumer
• Distribution of goods and services

  Producer => Wholesaler => Agent => Retailer => Consumer
• Intermediaries in distribution

  • Wholesaler
  • Agent
  • Retailer
• Indirect distribution channel


  • Types of intermediaries: sales agent or broker for industrial goods
  • Retailer for consumer goods
  • Authorised dealer in the automobile industry
  • Franchise in car-hire and fast-food businesses
• Benefits of direct consumer selling

  - high costs of distribution through the middlemen can be cut

  - It is good for technical goods which require demonstration before sale and after sales services
• Methods of direct consumer selling

  • Online (Internet) sales
  • Telephone sales
  • Mail order sales
  • The business possesses its own sales force (sales reps)
• Producer-wholesaler-retailer-consumer

  Traditional channel for many consumer goods
• For exported goods, many companies work with agents
• Producers often use their own sales staff for technical products sold to other companies (BtoB): the sales reps are able to demonstrate and explain the products
• Many publishers now sell books online, cutting out the retailer
• Some producers send out a lot of mail-order merchandising catalogues
• Customers can usually order goods by telephone as well as by mail or online
• Traditional types of retailers or “Bricks & Mortar” stores


  • “Bricks & Mortar” shops or stores refer to businesses that have physical (offline) presences - the shops that you can drive to and enter physically to see, touch, and buy goods
• Traditional types of retailers or "Bricks & Mortar" stores

  • Shopping Malls
  • Hypermarkets
  • Supermarkets
  • Department Stores
  • Multiple (Chain Stores)
  • Discount Stores
  • Convenience Stores
  • Grocer
  • Vending Machines
  • Market Stalls
  • Mobile Shops
  • Mail Order
• Bricks & Clicks

  A business model that integrates both offline (bricks) and online (clicks) presences
• Bricks & Clicks business model

  Allows customers to order products either online or physically in one of their stores, pick up orders at a local branch, or get them delivered to their home
• Mobile phone apps are a growing shopping platform enabling customers to shop at their convenience without being at a computer
• Shopping malls


  Groups of shops and other service providers (restaurants, coffee shops, cinemas) under one roof
• Hypermarkets


  Large shops outside a town with large variety of goods for retailers and customers
• Supermarkets


  Large shops that offer variety of goods to consumers such as food items, beverages but also home accessories and clothes
• Department stores


  Large shops with several floors and various departments offering different types of goods
• Multiple (chain stores)


  Shops owned by the same company
• Discount stores


  Sell goods that are lower than normal
• Convenience stores


  Small, neighbourhood shops selling food and household goods, usually open until late
• Grocers


  A shop selling foodstuffs (meat, dairy products)
• Vending machines


  Buy some food, hot and cold drinks by putting money into slots
• Market stalls


  A table or small open-fronted shop in a public place (a green market place such as Dolac)
• Mobile shops


  Can move easily, usually sell food
• Mail order


  Sell through the post (catalogues, brochures)