All questions of Internal Trade for Commerce Exam

Small-scale fixed retailers include:
A: Pedlars
- Pedlars are small-scale retailers who sell goods by traveling from place to place, typically on foot.
- They carry their merchandise with them and often sell items such as clothing, accessories, household goods, and small electronics.
- Pedlars may set up temporary stalls or display their goods on the streets or in public spaces.
B: General stores
- General stores are small-scale retail establishments that sell a wide variety of everyday items and household goods.
- They often stock a range of products including groceries, toiletries, cleaning supplies, stationery, and basic clothing.
- General stores are typically found in rural areas or small towns where there may be limited access to larger retail chains.
C: Cheap Jacks
- Cheap Jacks are small-scale retailers who specialize in selling low-cost or discounted merchandise.
- They may operate from small shops or temporary stalls and offer a wide range of products at affordable prices.
- Cheap Jacks often sell items that are overstocked, out-of-season, or slightly damaged, providing customers with bargain deals.
D: Hawkers
- Hawkers are small-scale retailers who sell their products by moving from place to place, often on foot or using bicycles or carts.
- They typically sell a specific type of product, such as street food, snacks, fruits, vegetables, or small household items.
- Hawkers may call out or display their goods to attract customers and often operate in busy marketplaces, street corners, or residential areas.
Overall, small-scale fixed retailers play an important role in providing convenience and accessibility to customers, especially in areas where larger retail chains may not be readily available. They offer a diverse range of products and often cater to specific needs and preferences of the local community.

Understanding Consumers Co-operative Store
Consumers co-operative stores are unique retail structures designed to empower consumers by allowing them to buy and sell collectively. Here's a detailed explanation of why this option is the correct answer.
Collective Buying
- Economies of Scale: By pooling resources, members can purchase goods in bulk, reducing costs. This collective buying power leads to lower prices for consumers.
- Shared Interests: Members of the co-operative share similar interests. They come together to ensure they get the best value for their money, as they are directly involved in the decision-making process.
Profit Retention
- Member Benefits: Profits generated from sales are typically redistributed among the members based on their purchases. This means that instead of profits going to external shareholders, they benefit the members directly.
- Reinvestment in the Community: Remaining profits can be reinvested into the co-operative or the community, enhancing services and products available to members.
Community Focus
- Local Sourcing: Many co-operatives focus on sourcing products from local suppliers, thereby supporting the local economy and ensuring fresh, quality goods.
- Member Engagement: Consumers co-operative stores foster a sense of community, as members often engage in activities that promote local interests and sustainability.
Conclusion
In summary, consumers co-operative stores aim to achieve economic efficiency through collective purchasing and profit retention. This model not only benefits individual members but also strengthens community ties and supports local economies, making it a viable option in the retail landscape.

Explanation:

A broker is an agent who merely brings the buyer and the seller into contact. They act as intermediaries between the buyer and the seller, facilitating the transaction without taking ownership of the goods or services being bought or sold.

Commission agent: A commission agent is a person who acts on behalf of a principal to sell goods or services. They receive a commission or percentage of the sales as compensation for their services. Unlike a broker, a commission agent takes ownership of the goods or services and sells them on behalf of the principal.

Stockist: A stockist is a person or entity that holds stocks or inventory of goods for distribution or sale. They purchase goods directly from the manufacturers or suppliers and store them in warehouses or distribution centers until they are sold to retailers or end customers. Stockists do not act as intermediaries between buyers and sellers but rather as a source of supply for retailers.

Therefore, the correct answer is option 'C) Broker' as brokers bring the buyer and the seller into contact without taking ownership of the goods or services being bought or sold.

Explanation:

The correct answer is option 'D', Value Added Tax.

Value Added Tax (VAT) is a type of tax imposed on goods and services at each stage of production or distribution, starting from raw materials to the final product. It is a multi-stage tax that ultimately accrues to the government.

The government has decided to replace the existing Sales Tax with the Value Added Tax system. The reason behind this is that the VAT system is more efficient and transparent than the sales tax system. VAT is considered to be a more progressive tax system because it taxes the value added at each stage of production or distribution, rather than taxing the final sale price of the product or service.

Under the Sales Tax system, tax is levied only on the final sale of the product or service. However, under the VAT system, tax is levied on each stage of production or distribution, which makes it more comprehensive and efficient.

Benefits of implementing VAT:

1. Increased revenue: VAT is a more comprehensive and efficient tax system, which can help increase revenue for the government.

2. Fairness: VAT is considered to be a more progressive tax system because it taxes the value added at each stage of production or distribution, rather than taxing the final sale price of the product or service.

3. Transparency: VAT is a more transparent tax system, as it is easier to track and monitor the movement of goods and services at each stage of production or distribution.

4. Reduced tax evasion: VAT can help reduce tax evasion, as it is more difficult to evade tax at each stage of production or distribution.

Conclusion:

The government has decided to replace the existing Sales Tax with the Value Added Tax system, which is a more efficient, transparent, and comprehensive tax system. The VAT system can help increase revenue for the government, promote fairness, transparency, and reduce tax evasion.

The Federation of Indian Chambers of Commerce and Industry (FICCI) is an association of business organisations in India. Established in 1927, on the advice of Mahatma Gandhi by GD Birla and Purushottam Das Thakurdas, it is the largest, oldest and the apex business organisation in India. It is a non-government, not-for-profit organisation. FICCI draws its membership from the corporate sector, both private and public, including SMEs and MNCs. The chamber has an indirect membership of over 250,000 companies from various regional chambers of commerce. It is involved in sector specific business polus building, and business promotion and networking. It is headquartered in the national capital New Delhi and has presence in 12 states in India and 8 countries across the world.

Eliminating Risk of Bad Debts in Mail Order Trading House

Bad debts are the amounts that are not recoverable from customers who have taken goods or services on credit. The risk of bad debts can be a significant concern for businesses that offer credit sales. However, in the case of mail order trading houses, the risk of bad debts is eliminated when payment is received through V.P.P. Let's discuss how.

What is a Mail Order Trading House?

A mail order trading house is a retail business that operates through mail order catalogs or online shopping platforms. Customers place orders by mail or online, and the products are delivered to their doorstep through courier or postal services. Mail order trading houses offer a wide range of products, from clothing and electronics to home goods and groceries.

What is V.P.P.?

V.P.P. stands for Value Payable Post. It is a postal service offered by the Indian Postal Department that allows customers to pay for goods at the time of delivery. The postman collects the payment on behalf of the seller and delivers the product to the customer. This service is beneficial for customers who do not have access to online payment methods or are not comfortable with paying in advance.

How V.P.P. Eliminates the Risk of Bad Debts?

When a customer places an order with a mail order trading house, they have the option to pay through V.P.P. This means that the customer pays for the product at the time of delivery, and the postman collects the payment on behalf of the trading house. This eliminates the risk of bad debts as the trading house receives payment before delivering the product. Even if the customer refuses to accept the product or returns it, the trading house has already received payment, so there is no risk of bad debts.

Conclusion

In conclusion, the risk of bad debts in mail order trading houses is eliminated when payment is received through V.P.P. This is a convenient and secure payment method for customers and a safe and reliable way for trading houses to receive payment for their goods.

A department store is a huge retail shop situated at a central place in the city, divided into a number of small shops or departments each dealing with one or two lines of goods and specialising in those lines. All such departments or speciality shops are under one roof and under one management and control.

Itinerant retailers are those who don't have a fixed stall or shop . they travel form places to places and sell their articles . also the articles are cheap and usually low quality . but let's not judge them , a work is a work .

An attorney is a special form of agent appointed by a principal by deed (known as "power of attorney") to create a legally binding contract on behalf of the principal with a third party or to do any other acts on behalf of the principal.

Producer → Customer (Zero-level Channel) The producer sells the goods or provides the service directly to the consumer with no involvement with a middle man such as an intermediary, a wholesaler, a retailer, an agent, or a reseller.

To give a detailed solution, we can break down the answer into headings and bullet points:
Definition:
- The purchase of goods from a foreign country is known as import.
Explanation:
- Import is the process of bringing goods or services into one country from another country for sale or use.
- It involves purchasing products from a foreign country and bringing them into the domestic market.
- Importing goods allows countries to access products that are not available domestically or are cheaper to produce abroad.
- Imports can include a wide range of products such as raw materials, finished goods, machinery, electronics, and more.
- The import process involves various steps, including customs clearance, payment of import duties or taxes, and compliance with import regulations.
Other Options:
- Export: The sale or shipment of goods to a foreign country.
- Entreport: A location where goods are temporarily stored or transshipped during international trade.
- Re-Export: The process of exporting goods that were previously imported.
Therefore, the correct answer is Option B: Import, as it refers to the purchase of goods from a foreign country.

Wholesaler?s deals in Large quantity of goods
Wholesalers are businesses that purchase goods in bulk from manufacturers or producers and then sell them to retailers or other businesses. They act as intermediaries between the producers and the retailers, helping to distribute goods efficiently.
When it comes to the quantity of goods, wholesalers typically deal in large quantities. This is because their main purpose is to buy goods in bulk and sell them in smaller quantities to retailers. Dealing in large quantities allows wholesalers to take advantage of economies of scale and negotiate better prices with manufacturers.
Here are some reasons why wholesalers deal in large quantities of goods:
1. Economies of scale: Buying in large quantities allows wholesalers to benefit from lower per-unit costs. They can negotiate better prices with manufacturers and obtain discounts due to the large volume of goods they purchase.
2. Cost efficiency: Dealing in large quantities helps wholesalers minimize transportation and storage costs. They can ship goods in bulk, reducing shipping expenses per unit. Additionally, they can store goods in larger warehouses, which can be more cost-effective than storing smaller quantities in multiple locations.
3. Meeting retailer demands: Retailers often require a steady supply of goods to meet customer demands. Wholesalers that deal in large quantities can ensure a consistent supply, helping retailers maintain their inventory levels.
4. Competitive advantage: Wholesalers that can offer large quantities of goods at competitive prices have an advantage over their competitors. Retailers prefer to work with wholesalers that can fulfill their bulk orders efficiently and cost-effectively.
Overall, dealing in large quantities of goods is a key characteristic of wholesalers. It allows them to take advantage of economies of scale, reduce costs, meet retailer demands, and gain a competitive edge in the market.

Answer:
Definition of Multiple Shop:
A multiple shop is a network of a number of branches situated at different localities in the city or in different parts of the country. It refers to a retail business model where a company operates multiple stores in various locations to cater to a wider customer base and increase its market presence.
Advantages of Multiple Shop:
- Increased reach: By having multiple shops spread across different localities or regions, the company can reach a larger customer base and expand its market reach.
- Convenience for customers: Multiple shops make it more convenient for customers to access the company's products or services, as they can find a store closer to their location.
- Brand visibility: Having multiple shops increases the brand visibility and creates a stronger brand presence in the market.
- Efficient distribution: With multiple shops, the company can ensure efficient distribution of products, reducing transportation costs and delivery time.
- Market dominance: Operating multiple shops allows the company to dominate the market and gain a competitive advantage over smaller businesses.
- Localized marketing: Each shop can tailor its marketing strategies and offerings based on the specific needs and preferences of the local customers, leading to better customer engagement and satisfaction.
Examples of Multiple Shop:
- Retail chains like Walmart, Target, and Tesco operate multiple shops across different locations.
- Coffee chains like Starbucks and Costa Coffee have multiple shops in various cities and neighborhoods.
- Fast-food chains like McDonald's and Burger King have multiple outlets to serve customers in different areas.
In conclusion, a multiple shop is an effective retail business strategy that allows companies to expand their reach, increase brand visibility, and better serve their customers.

Definition of Wholesale Trade

Key Points
- Wholesale trade deals with the distribution of goods and services on a large scale.
- The primary customers of wholesalers are retailers, professional business users, and other wholesalers.
- Wholesalers purchase goods directly from manufacturers or producers at lower prices due to their bulk buying power.
- They then sell these goods to retailers or other businesses at a slightly higher price, allowing them to make a profit.
- Wholesalers provide a crucial link in the supply chain by bridging the gap between manufacturers and retailers.
- They often offer additional services such as storage, transportation, and packaging to facilitate the distribution process.
- Wholesale trade is characterized by the sale of goods in large quantities, typically in bulk or by the case.
- It requires a deep understanding of market trends, customer demands, and pricing strategies.
- Wholesale trade plays a vital role in the economy by ensuring the efficient flow of goods from producers to consumers.
Conclusion
Wholesale trade is essential for the smooth functioning of the supply chain and the distribution of goods to retailers and other businesses. By purchasing products in large quantities and selling them at a slightly higher price, wholesalers enable retailers to access a wide range of goods without having to deal directly with manufacturers. This intermediation process helps to drive economic growth and ensures the availability of goods to consumers.

Understanding the Role of Wholesalers
Wholesalers play a crucial role in the supply chain by managing inventory and influencing market prices. Their strategies significantly impact price fluctuations.
Price Management
- Wholesalers buy goods in large quantities and hold them in stock.
- They monitor market conditions to determine the best selling times.
Market Fluctuations
- When prices fall, wholesalers may withhold goods from the market.
- By doing so, they create scarcity, which can help stabilize prices.
Releasing Goods
- Conversely, when prices rise, wholesalers release their held stock.
- This action can help meet increased demand and prevent excessive price hikes.
Conclusion
Wholesalers effectively manage price fluctuations by strategically controlling the availability of goods. Their ability to hold back stock during low prices and release it during high prices makes them vital players in the market, ensuring price stability and supply efficiency.

Entrepot

Definition:
Entrepot refers to a trade activity where goods are imported into a country for the purpose of export to another country. It involves the process of receiving goods from one country, storing them temporarily, and then exporting them to another country. The country where the goods are temporarily stored and traded is called an entrepot.

Explanation:
The entrepot trade is a significant aspect of international trade, especially in countries with strategic geographical locations and well-developed ports. It involves the intermediary role of a middleman or entrepot merchant who facilitates the movement of goods between different countries. Such trade activities are typically carried out in free trade zones or special economic zones, which offer various benefits such as tax exemptions, customs facilitation, and streamlined logistics.

Characteristics of Entrepot Trade:
1. Import for Re-export: The primary purpose of entrepot trade is to import goods into a country only to re-export them to another country. The goods do not enter the domestic market of the entrepot country.

2. Temporary Storage: The goods imported for re-export are stored temporarily in the entrepot country's warehouses or ports. These facilities provide secure storage, handling, and documentation services.

3. Value Addition: In some cases, the entrepot country may engage in value addition activities such as packaging, labeling, or assembly of goods before they are exported to the final destination. This adds value to the goods and increases their market appeal.

4. Trade Facilitation: Entrepot trade plays a crucial role in facilitating international trade by providing a convenient and efficient platform for the exchange of goods. It helps in reducing transportation costs, minimizing trade barriers, and enhancing trade flows between different countries.

5. Economic Benefits: Countries engaged in entrepot trade derive economic benefits through revenue generation from handling fees, customs duties, warehousing charges, and other associated services. It also stimulates employment opportunities and promotes economic growth.

Examples of Entrepot Trade:
1. Singapore: Singapore is a prime example of a country that has successfully established itself as an entrepot hub. Its strategic location along major shipping routes and well-developed infrastructure have made it a preferred destination for entrepot trade.

2. Dubai: Dubai has emerged as a major entrepot center in the Middle East region. Its free trade zones, such as Jebel Ali Free Zone, attract numerous businesses engaged in import and re-export activities.

3. Hong Kong: Hong Kong has historically been an entrepot city, serving as a gateway to China and other Asian markets. Its well-connected transportation network and business-friendly environment have made it a prominent player in global trade.

In conclusion, entrepot trade refers to the importation of goods for the purpose of re-export to another country. It involves temporary storage, value addition, and trade facilitation. Countries engaged in entrepot trade benefit economically and contribute to the smooth flow of international trade.

Storage

Maintaining proper stock levels and ensuring the safety and security of goods are key responsibilities of a warehouse keeper. Let's break down the importance of storage in detail:

Organized Inventory Management:
- The warehouse keeper must categorize and store goods in an organized manner to easily locate and access them when needed.
- Efficient storage practices help in reducing errors, improving order fulfillment, and enhancing overall operational efficiency.

Protection of Goods:
- Proper storage techniques such as stacking goods safely, using appropriate packaging materials, and maintaining optimal environmental conditions help in preventing damage or spoilage of goods.
- This ensures that the quality of goods is maintained until they are ready for dispatch.

Security Measures:
- Warehouse keepers are responsible for implementing security measures such as CCTV surveillance, access control systems, and inventory tracking to safeguard goods from theft or unauthorized access.
- By ensuring the security of stored goods, warehouse keepers contribute to minimizing losses and maintaining the trust of customers.

Space Utilization:
- Effective storage practices enable warehouse keepers to maximize the utilization of available space within the facility.
- This helps in accommodating a larger volume of goods and optimizing the use of resources.

In conclusion, the primary purpose of a warehouse keeper is to accept goods for the purpose of storage. By focusing on organized inventory management, protection of goods, security measures, and space utilization, warehouse keepers play a crucial role in the smooth functioning of supply chains and logistics operations.