Notes : Internal Trade 2 Class 11 Notes | EduRev

Class 11 : Notes : Internal Trade 2 Class 11 Notes | EduRev

 Page 1


7 5  XI –  Business Studies 
AK 
CHAPTER   9 
Internal Trade 
Trade refers to the process of buying and selling of goods and services with the 
objective of earning profit. When trade takes place between the people of the 
same country then it is termed as internal trade. Infact, buying and selling of 
goods and services within the geographical boundaries of a nation or country is 
called internal trade. Internal trade can be classifed into two broad categories. 
i) Wholesale trade 
ii) Retail trade 
Wholesale trade : Buying and selling of goods and services in large quantities for 
the purpose of resale or intermediate use is referred to as wholesale trade. 
Wholesalers acts as an important link between manufacturers and retailers. They 
purchase in bulk and sell in small lots to retailers. 
SERVICES OF WHOLESALER TO MANUFACTURERS. 
1. Wholesalers enable manufacturers to undertake large scale production as 
they purchase goods in large quantities from them. 
2. Wholesaler deals in goods in their own name and bear variety of risks such 
as the risk of fall in prices, theft, pilferage spoilage, fire etc. 
3. Wholesalers provide financial assistance to the manufacturers by making 
cash payment for the purchased goods. 
4. Wholesaler provide various useful information regarding the customer 
preference, market conditions etc to the manufacturer. 
5. Wholesalers help manufacturer in marketing function by purchasing goods 
from them and selling them to the retailers. 
6. Wholesalers provide the storage facilities also as they hold the goods in 
their warehouses/Godowns. 
SERVICES OF WHOLESALERS TO RETAILERS 
1. Wholesalers make goods available to the retailers, who make them available 
to the ultimate customers.
Page 2


7 5  XI –  Business Studies 
AK 
CHAPTER   9 
Internal Trade 
Trade refers to the process of buying and selling of goods and services with the 
objective of earning profit. When trade takes place between the people of the 
same country then it is termed as internal trade. Infact, buying and selling of 
goods and services within the geographical boundaries of a nation or country is 
called internal trade. Internal trade can be classifed into two broad categories. 
i) Wholesale trade 
ii) Retail trade 
Wholesale trade : Buying and selling of goods and services in large quantities for 
the purpose of resale or intermediate use is referred to as wholesale trade. 
Wholesalers acts as an important link between manufacturers and retailers. They 
purchase in bulk and sell in small lots to retailers. 
SERVICES OF WHOLESALER TO MANUFACTURERS. 
1. Wholesalers enable manufacturers to undertake large scale production as 
they purchase goods in large quantities from them. 
2. Wholesaler deals in goods in their own name and bear variety of risks such 
as the risk of fall in prices, theft, pilferage spoilage, fire etc. 
3. Wholesalers provide financial assistance to the manufacturers by making 
cash payment for the purchased goods. 
4. Wholesaler provide various useful information regarding the customer 
preference, market conditions etc to the manufacturer. 
5. Wholesalers help manufacturer in marketing function by purchasing goods 
from them and selling them to the retailers. 
6. Wholesalers provide the storage facilities also as they hold the goods in 
their warehouses/Godowns. 
SERVICES OF WHOLESALERS TO RETAILERS 
1. Wholesalers make goods available to the retailers, who make them available 
to the ultimate customers.
7 6  XI –  Business Studies 
AK 
2. Wholesalers help retailers in the marketing of the goods by undertaking 
advertising and other sales promotional activities. 
3. Wholesalers help retailers by providing credit facility to them. 
4. Wholesalers sell goods to retailers in small quantities and thus retailers do 
not face the risk of storage, pilferage, reduction in prices etc. 
5. Wholesalers do have specialised knowledge and they can help retailers by 
providing the same to them. They inform the retailers about new products, 
their uses and quality etc. 
RETAIL TRADE : 
Buying of goods in large quantities from the wholesalers and selling them in 
small quantities to the ultimate consumers is known as retail trade. Retailers 
serve as an important link between the producers and final consumers in the 
distribution of products and services. 
SERVICES OF RETAILERS TO MANUFACTURERS AND 
WHOLESALER :- 
1. Retailers help manufacturers & wholesalers in the distribution of their 
goods & services to the ultimate consumers. 
2. Retailers help manufacturers & wholesalers in promoting their goods & 
services. 
3. Retailers undertake personal selling efforts and thus, help manufacturers 
and wholesalers in the process of actualising the sale of the products. 
4. Retailers collect and provide market information about the tastes, 
preferences and attitudes of consumers to the producers. 
5. Retailers make manufacturer and wholesaler free from the burden of 
making individual sales and thus help them to operate on large scale 
production. 
SERVICES OF RETAILERS TO CONSUMERS :- 
1. Retailers provide goods to consumers according to their requirements. 
2. Retailers deals in large varieties of products of different manufacturers and 
thus they offer wide selection to the consumers. 
3. Retailers provide important information about the new products to the 
consumers.
Page 3


7 5  XI –  Business Studies 
AK 
CHAPTER   9 
Internal Trade 
Trade refers to the process of buying and selling of goods and services with the 
objective of earning profit. When trade takes place between the people of the 
same country then it is termed as internal trade. Infact, buying and selling of 
goods and services within the geographical boundaries of a nation or country is 
called internal trade. Internal trade can be classifed into two broad categories. 
i) Wholesale trade 
ii) Retail trade 
Wholesale trade : Buying and selling of goods and services in large quantities for 
the purpose of resale or intermediate use is referred to as wholesale trade. 
Wholesalers acts as an important link between manufacturers and retailers. They 
purchase in bulk and sell in small lots to retailers. 
SERVICES OF WHOLESALER TO MANUFACTURERS. 
1. Wholesalers enable manufacturers to undertake large scale production as 
they purchase goods in large quantities from them. 
2. Wholesaler deals in goods in their own name and bear variety of risks such 
as the risk of fall in prices, theft, pilferage spoilage, fire etc. 
3. Wholesalers provide financial assistance to the manufacturers by making 
cash payment for the purchased goods. 
4. Wholesaler provide various useful information regarding the customer 
preference, market conditions etc to the manufacturer. 
5. Wholesalers help manufacturer in marketing function by purchasing goods 
from them and selling them to the retailers. 
6. Wholesalers provide the storage facilities also as they hold the goods in 
their warehouses/Godowns. 
SERVICES OF WHOLESALERS TO RETAILERS 
1. Wholesalers make goods available to the retailers, who make them available 
to the ultimate customers.
7 6  XI –  Business Studies 
AK 
2. Wholesalers help retailers in the marketing of the goods by undertaking 
advertising and other sales promotional activities. 
3. Wholesalers help retailers by providing credit facility to them. 
4. Wholesalers sell goods to retailers in small quantities and thus retailers do 
not face the risk of storage, pilferage, reduction in prices etc. 
5. Wholesalers do have specialised knowledge and they can help retailers by 
providing the same to them. They inform the retailers about new products, 
their uses and quality etc. 
RETAIL TRADE : 
Buying of goods in large quantities from the wholesalers and selling them in 
small quantities to the ultimate consumers is known as retail trade. Retailers 
serve as an important link between the producers and final consumers in the 
distribution of products and services. 
SERVICES OF RETAILERS TO MANUFACTURERS AND 
WHOLESALER :- 
1. Retailers help manufacturers & wholesalers in the distribution of their 
goods & services to the ultimate consumers. 
2. Retailers help manufacturers & wholesalers in promoting their goods & 
services. 
3. Retailers undertake personal selling efforts and thus, help manufacturers 
and wholesalers in the process of actualising the sale of the products. 
4. Retailers collect and provide market information about the tastes, 
preferences and attitudes of consumers to the producers. 
5. Retailers make manufacturer and wholesaler free from the burden of 
making individual sales and thus help them to operate on large scale 
production. 
SERVICES OF RETAILERS TO CONSUMERS :- 
1. Retailers provide goods to consumers according to their requirements. 
2. Retailers deals in large varieties of products of different manufacturers and 
thus they offer wide selection to the consumers. 
3. Retailers provide important information about the new products to the 
consumers.
7 7  XI –  Business Studies 
AK 
4. Retailers also provide after sales services in the form of home delivery, 
supply of spare parts and attending to the customers. 
5. Retailers sometimes provide goods to customers on credit basis also, which 
increase their level of consumption and standard of living. 
6. Retailers ensure regular availability of different goods to customers. 
TYPES OF RETAILING TRADE 
Retail trade can be classified into following two categories on the basis whether 
or not they have a fixed place of business. 
i) Itinerant Retailers 
ii) Fixed shop Retailers. 
I. Itinerant Retailers : - The retailers who do not have a fixed place of business 
to operate from are called itinerant retailers. They have to move from one 
place to another alongwith their goods in search of consumers. 
Following are the characteristics of itinerant retailers. 
1. They are small traders having limited resources. 
2. they generally deals in consumer products of daily use. 
3. They emphasize on providing greater customer services. 
4. They do not have any fixed place to operate from. 
TYPES OF ITINERANT RETAILERS 
1. Peddler and hawkers : They are small producers who generally deals in 
non-standardised and low-value product such as fruits, vegetables, toys etc. 
They carry the products on a bicycle, a hand cart, Cycle rickshaw or on their 
heads and move from place to place to sell their products at the doorstep of 
the customers 
2. Market traders : They are the small retailer who open their shops at 
different places and sell the goods on fixed days such as every saturday or 
tuesday. These trader deals in single line of goods such as toys, readymade 
garnment crockery etc. 
3. Street traders (Pavement Vendors) : These types of retailers are found at 
places where huge floating population gather such as railway station, bus 
stand etc and sell consumer items of common use, such as stationery, 
newspapers, toys etc. They do not change their place of business frequently.
Page 4


7 5  XI –  Business Studies 
AK 
CHAPTER   9 
Internal Trade 
Trade refers to the process of buying and selling of goods and services with the 
objective of earning profit. When trade takes place between the people of the 
same country then it is termed as internal trade. Infact, buying and selling of 
goods and services within the geographical boundaries of a nation or country is 
called internal trade. Internal trade can be classifed into two broad categories. 
i) Wholesale trade 
ii) Retail trade 
Wholesale trade : Buying and selling of goods and services in large quantities for 
the purpose of resale or intermediate use is referred to as wholesale trade. 
Wholesalers acts as an important link between manufacturers and retailers. They 
purchase in bulk and sell in small lots to retailers. 
SERVICES OF WHOLESALER TO MANUFACTURERS. 
1. Wholesalers enable manufacturers to undertake large scale production as 
they purchase goods in large quantities from them. 
2. Wholesaler deals in goods in their own name and bear variety of risks such 
as the risk of fall in prices, theft, pilferage spoilage, fire etc. 
3. Wholesalers provide financial assistance to the manufacturers by making 
cash payment for the purchased goods. 
4. Wholesaler provide various useful information regarding the customer 
preference, market conditions etc to the manufacturer. 
5. Wholesalers help manufacturer in marketing function by purchasing goods 
from them and selling them to the retailers. 
6. Wholesalers provide the storage facilities also as they hold the goods in 
their warehouses/Godowns. 
SERVICES OF WHOLESALERS TO RETAILERS 
1. Wholesalers make goods available to the retailers, who make them available 
to the ultimate customers.
7 6  XI –  Business Studies 
AK 
2. Wholesalers help retailers in the marketing of the goods by undertaking 
advertising and other sales promotional activities. 
3. Wholesalers help retailers by providing credit facility to them. 
4. Wholesalers sell goods to retailers in small quantities and thus retailers do 
not face the risk of storage, pilferage, reduction in prices etc. 
5. Wholesalers do have specialised knowledge and they can help retailers by 
providing the same to them. They inform the retailers about new products, 
their uses and quality etc. 
RETAIL TRADE : 
Buying of goods in large quantities from the wholesalers and selling them in 
small quantities to the ultimate consumers is known as retail trade. Retailers 
serve as an important link between the producers and final consumers in the 
distribution of products and services. 
SERVICES OF RETAILERS TO MANUFACTURERS AND 
WHOLESALER :- 
1. Retailers help manufacturers & wholesalers in the distribution of their 
goods & services to the ultimate consumers. 
2. Retailers help manufacturers & wholesalers in promoting their goods & 
services. 
3. Retailers undertake personal selling efforts and thus, help manufacturers 
and wholesalers in the process of actualising the sale of the products. 
4. Retailers collect and provide market information about the tastes, 
preferences and attitudes of consumers to the producers. 
5. Retailers make manufacturer and wholesaler free from the burden of 
making individual sales and thus help them to operate on large scale 
production. 
SERVICES OF RETAILERS TO CONSUMERS :- 
1. Retailers provide goods to consumers according to their requirements. 
2. Retailers deals in large varieties of products of different manufacturers and 
thus they offer wide selection to the consumers. 
3. Retailers provide important information about the new products to the 
consumers.
7 7  XI –  Business Studies 
AK 
4. Retailers also provide after sales services in the form of home delivery, 
supply of spare parts and attending to the customers. 
5. Retailers sometimes provide goods to customers on credit basis also, which 
increase their level of consumption and standard of living. 
6. Retailers ensure regular availability of different goods to customers. 
TYPES OF RETAILING TRADE 
Retail trade can be classified into following two categories on the basis whether 
or not they have a fixed place of business. 
i) Itinerant Retailers 
ii) Fixed shop Retailers. 
I. Itinerant Retailers : - The retailers who do not have a fixed place of business 
to operate from are called itinerant retailers. They have to move from one 
place to another alongwith their goods in search of consumers. 
Following are the characteristics of itinerant retailers. 
1. They are small traders having limited resources. 
2. they generally deals in consumer products of daily use. 
3. They emphasize on providing greater customer services. 
4. They do not have any fixed place to operate from. 
TYPES OF ITINERANT RETAILERS 
1. Peddler and hawkers : They are small producers who generally deals in 
non-standardised and low-value product such as fruits, vegetables, toys etc. 
They carry the products on a bicycle, a hand cart, Cycle rickshaw or on their 
heads and move from place to place to sell their products at the doorstep of 
the customers 
2. Market traders : They are the small retailer who open their shops at 
different places and sell the goods on fixed days such as every saturday or 
tuesday. These trader deals in single line of goods such as toys, readymade 
garnment crockery etc. 
3. Street traders (Pavement Vendors) : These types of retailers are found at 
places where huge floating population gather such as railway station, bus 
stand etc and sell consumer items of common use, such as stationery, 
newspapers, toys etc. They do not change their place of business frequently.
7 8  XI –  Business Studies 
AK 
4. Cheap Jacks : They are small retailers who have independent shops of a 
temporary nature in a business locality. They keep on changing their 
bussiness from one locality to another but not very frequently. They deal in 
consumer items such as repair of watches, shoes, buckets etc. 
II. FIXED SHOP RETAILERS 
Retailers who maintain permanent establishment to sell their goods are called 
fixed shop retailers. Following are the main characterstics of fixed shop retailers: 
1. As compare to itinerant traders, fixed shop retailers have greater resources. 
2. They deals in durable as well as non-durable goods. 
3. There are different size groups of fixed shop retailers varying from very 
small to very large. 
4. They provide greater services to the customers such as home delivery, 
repairs, credit facilities etc. 
TYPES OF FIXED SHOP RETAILERS : 
Fixed shop retailers can be classified into two types 
(a) Small shop keepers (b) Large retailers. 
FIXED SHOP SMALL RETAILERS : 
It include following 
1. General Stores : These shops provide different product required to satisfy 
the day-to-day needs of the consumers such as stationery items, grocery 
items etc. 
2. Speciality Shops : These shops deal in specific line of products like only in 
ladies shoes, children garments, men s wear, toys etc. These shops are 
generally located in a central place where a large number of customers can 
be attracted. 
3. Street Stall Holders : They are small retailer who are generally found at 
place having floating populations such as street crossing, main road etc. 
They deal in cheap variety of goods such as soft drinks cigarettes, toys etc. 
4. Second hand goods shop : These shops deal in secondhand or used goods 
such as books, clothes, furniture, automobile etc. They are generally located 
at street crossings or in busy streets in the form of a stall or a temporary 
structure.
Page 5


7 5  XI –  Business Studies 
AK 
CHAPTER   9 
Internal Trade 
Trade refers to the process of buying and selling of goods and services with the 
objective of earning profit. When trade takes place between the people of the 
same country then it is termed as internal trade. Infact, buying and selling of 
goods and services within the geographical boundaries of a nation or country is 
called internal trade. Internal trade can be classifed into two broad categories. 
i) Wholesale trade 
ii) Retail trade 
Wholesale trade : Buying and selling of goods and services in large quantities for 
the purpose of resale or intermediate use is referred to as wholesale trade. 
Wholesalers acts as an important link between manufacturers and retailers. They 
purchase in bulk and sell in small lots to retailers. 
SERVICES OF WHOLESALER TO MANUFACTURERS. 
1. Wholesalers enable manufacturers to undertake large scale production as 
they purchase goods in large quantities from them. 
2. Wholesaler deals in goods in their own name and bear variety of risks such 
as the risk of fall in prices, theft, pilferage spoilage, fire etc. 
3. Wholesalers provide financial assistance to the manufacturers by making 
cash payment for the purchased goods. 
4. Wholesaler provide various useful information regarding the customer 
preference, market conditions etc to the manufacturer. 
5. Wholesalers help manufacturer in marketing function by purchasing goods 
from them and selling them to the retailers. 
6. Wholesalers provide the storage facilities also as they hold the goods in 
their warehouses/Godowns. 
SERVICES OF WHOLESALERS TO RETAILERS 
1. Wholesalers make goods available to the retailers, who make them available 
to the ultimate customers.
7 6  XI –  Business Studies 
AK 
2. Wholesalers help retailers in the marketing of the goods by undertaking 
advertising and other sales promotional activities. 
3. Wholesalers help retailers by providing credit facility to them. 
4. Wholesalers sell goods to retailers in small quantities and thus retailers do 
not face the risk of storage, pilferage, reduction in prices etc. 
5. Wholesalers do have specialised knowledge and they can help retailers by 
providing the same to them. They inform the retailers about new products, 
their uses and quality etc. 
RETAIL TRADE : 
Buying of goods in large quantities from the wholesalers and selling them in 
small quantities to the ultimate consumers is known as retail trade. Retailers 
serve as an important link between the producers and final consumers in the 
distribution of products and services. 
SERVICES OF RETAILERS TO MANUFACTURERS AND 
WHOLESALER :- 
1. Retailers help manufacturers & wholesalers in the distribution of their 
goods & services to the ultimate consumers. 
2. Retailers help manufacturers & wholesalers in promoting their goods & 
services. 
3. Retailers undertake personal selling efforts and thus, help manufacturers 
and wholesalers in the process of actualising the sale of the products. 
4. Retailers collect and provide market information about the tastes, 
preferences and attitudes of consumers to the producers. 
5. Retailers make manufacturer and wholesaler free from the burden of 
making individual sales and thus help them to operate on large scale 
production. 
SERVICES OF RETAILERS TO CONSUMERS :- 
1. Retailers provide goods to consumers according to their requirements. 
2. Retailers deals in large varieties of products of different manufacturers and 
thus they offer wide selection to the consumers. 
3. Retailers provide important information about the new products to the 
consumers.
7 7  XI –  Business Studies 
AK 
4. Retailers also provide after sales services in the form of home delivery, 
supply of spare parts and attending to the customers. 
5. Retailers sometimes provide goods to customers on credit basis also, which 
increase their level of consumption and standard of living. 
6. Retailers ensure regular availability of different goods to customers. 
TYPES OF RETAILING TRADE 
Retail trade can be classified into following two categories on the basis whether 
or not they have a fixed place of business. 
i) Itinerant Retailers 
ii) Fixed shop Retailers. 
I. Itinerant Retailers : - The retailers who do not have a fixed place of business 
to operate from are called itinerant retailers. They have to move from one 
place to another alongwith their goods in search of consumers. 
Following are the characteristics of itinerant retailers. 
1. They are small traders having limited resources. 
2. they generally deals in consumer products of daily use. 
3. They emphasize on providing greater customer services. 
4. They do not have any fixed place to operate from. 
TYPES OF ITINERANT RETAILERS 
1. Peddler and hawkers : They are small producers who generally deals in 
non-standardised and low-value product such as fruits, vegetables, toys etc. 
They carry the products on a bicycle, a hand cart, Cycle rickshaw or on their 
heads and move from place to place to sell their products at the doorstep of 
the customers 
2. Market traders : They are the small retailer who open their shops at 
different places and sell the goods on fixed days such as every saturday or 
tuesday. These trader deals in single line of goods such as toys, readymade 
garnment crockery etc. 
3. Street traders (Pavement Vendors) : These types of retailers are found at 
places where huge floating population gather such as railway station, bus 
stand etc and sell consumer items of common use, such as stationery, 
newspapers, toys etc. They do not change their place of business frequently.
7 8  XI –  Business Studies 
AK 
4. Cheap Jacks : They are small retailers who have independent shops of a 
temporary nature in a business locality. They keep on changing their 
bussiness from one locality to another but not very frequently. They deal in 
consumer items such as repair of watches, shoes, buckets etc. 
II. FIXED SHOP RETAILERS 
Retailers who maintain permanent establishment to sell their goods are called 
fixed shop retailers. Following are the main characterstics of fixed shop retailers: 
1. As compare to itinerant traders, fixed shop retailers have greater resources. 
2. They deals in durable as well as non-durable goods. 
3. There are different size groups of fixed shop retailers varying from very 
small to very large. 
4. They provide greater services to the customers such as home delivery, 
repairs, credit facilities etc. 
TYPES OF FIXED SHOP RETAILERS : 
Fixed shop retailers can be classified into two types 
(a) Small shop keepers (b) Large retailers. 
FIXED SHOP SMALL RETAILERS : 
It include following 
1. General Stores : These shops provide different product required to satisfy 
the day-to-day needs of the consumers such as stationery items, grocery 
items etc. 
2. Speciality Shops : These shops deal in specific line of products like only in 
ladies shoes, children garments, men s wear, toys etc. These shops are 
generally located in a central place where a large number of customers can 
be attracted. 
3. Street Stall Holders : They are small retailer who are generally found at 
place having floating populations such as street crossing, main road etc. 
They deal in cheap variety of goods such as soft drinks cigarettes, toys etc. 
4. Second hand goods shop : These shops deal in secondhand or used goods 
such as books, clothes, furniture, automobile etc. They are generally located 
at street crossings or in busy streets in the form of a stall or a temporary 
structure.
7 9  XI –  Business Studies 
AK 
FIXED SHOP LARGE STORE OR LARGE RETAILERS 
Fixed shop large stores include following retailers 
1. Departmental Stores :- A Departmental store is a large retail outlet offering 
a wide variety of products, classified into well defined departments under 
one roof. It has a number of departments, each specialises in single line of 
product such as toiletries, medicines, furnitures, groceries etc within a sotre. 
Following are the features of a departmental store :- 
i) They are located at a central place so that maximum customers could reach 
there. 
ii) They provide all facilities such as restaurant, travel and information bureau, 
telephone booth, restrooms etc. 
iii) These stores are very large in size and so they are generally formed as a 
joint stock company managed by a board of directors. 
iv) All the purchases in a departmental store are made by the purchase 
department of the store centrally. 
v) A departmental store combines both the functions of retailing as well as 
warehousing. 
Advantages of Departmental Stores. 
1. They attract large number of customers as they are located at central places. 
2. They provide great convenience to customers as they can purchase number 
of goods at one place. 
3. They provide attractive services to customers like home delivery of goods, 
credit facilities, restrooms etc. 
4. They are able to undertake various promotional activities which help people 
to know about the products. 
5. They are organised at a very large scale and thus, benefits of large-scale 
operations are available to them. 
Limitations of Departmental Store. 
1. They operate on large scale which lead to lack of personal attention to the 
customers. 
2. They provide various services to the customers like restrooms, home 
delivery of goods etc which increases their operating cost and thus the 
overall price of the goods increases.
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