internal trade new.pptx

Internal trade

1. INTERNAL TRADE

2. INTERNAL TRADE Trade between people of the same country is known as Internal trade or Inland trade or Home trade or Domestic trade.

3. INTERNAL TRADE Internal Trade is classified into two: ● Wholesale Trade ● Retail Trade

4. WHOLESALE TRADE

5. WHOLESALE TRADE Buying and Selling of goods in large quantities from manufacturers or producers and selling them in small quantities to retailers. ● The person who deals in wholesale trade is known as Wholesaler. ● Wholesaler acts as a connecting link between producer and the retailer.

6. SERVICE OF WHOLESALERS

7. SERVICE TO MANUFACTURERS Facilitates Large Scale Production Wholesalers collect small orders from a number of retailers and pass such orders to manufacturers to enable large scale production

8. SERVICE TO MANUFACTURERS Bearing Risk Wholesalers keep large quantity goods at their warehouses. They have to bear risks such as fall in prices, theft, Spoilage, Fire etc...

9. SERVICE TO MANUFACTURERS Wholesalers generally make cash payment for the goods purchased by them. They also advance money to producers for bulk purchase

10. SERVICE TO MANUFACTURERS As wholesalers are in direct contact with retailers, they are in a position to advice manufacturers about customers taste, preferences , market conditions etc...

11. SERVICE TO MANUFACTURERS Help in Marketing functions Wholesalers distributes goods to a number of retailers who in turn sell these goods to large number of consumers. This relieves manufacturers from many of marketing activities and enable them to concentrate on production activity.

12. SERVICE TO MANUFACTURERS STORAGE Wholesalers take delivery of goods when these are produced in factory and keep them in their godown / warehouses.

13. SERVICE TO MANUFACTURERS ● Facilitate continuity in production Wholesalers facilitate continuity in production activity throughout the year by purchasing goods as and when these are produced.

14. Service to Retailers Availability of goods ● Wholesalers make the products of various manufacturers available to retailers

15. Service to Retailers Marketing Support ● Wholesalers perform marketing activities such as advertising and sales promotional activities. Retailers benefited by this.

16. Service to Retailers Grant of Credit ● Wholesalers generally extend credit facilities to their regular customers

17. Service to Retailers Specialised Knowledge ● Wholesalers inform the retailers about new products, their uses, quality, prices etc..

18. Service to Retailers Risk Sharing ● Wholesalers purchase goods in bulk quantities and sell in small quantities to retailers. It helps the retailers to avoid risk of storage, demand fluctuations etc...

19. RETAIL TRADE

20. RETAIL TRADE ● Retail Trade means all activities related to sale of goods to consumers for consumption. ● Person who sells goods to ultimate consumers are called Retailer . ● Retailer acts as a connecting link between wholesalers and consumers.

21. SERVICE OF RETAILERS

22. Service to Manufacturers and Wholesalers Help in distribution of goods Retailers helps in distribution of products to final consumers spread over different areas.

23. Service to Manufacturers and Wholesalers Enables large scale production Retailers makes individual sales to consumers. Hence Manufacturers and Wholesalers can concentrate on large scale operations

24. Service to Manufacturers and Wholesalers Collecting Market Information Retailers are in direct contact with consumers. So the can collect information about tastes, preferences and attitude of consumers.

25. Service to Manufacturers and Wholesalers Helps in Sales Promotion Manufacturers and Distributors carry on some promotional activities to increase sales. Retailers participate in these activities. Eg : Free Gifts, Discount coupons etc...

26. Service to Consumers Regular Availability of Products Maintains regular availability of products produced by different manufacturers

27. Service to Consumers Information about new products By displaying products, Retailers provide information about arrival, special features etc.. of new products

28. Service to Consumers Convenience in buying Retailers generally situated in residential areas. It is convenient to consumers to buy products.

29. Service to Consumers Wide Selection Retailers generally keep stock of a variety of products of different manufacturers. This enables consumers to make their choice out of a wide selection of goods.

30. Service to Consumers Retailers provide after sales service. Eg : Home delivery, Supply of spare parts

31. Service to Consumers Provide Credit Facilities Retailers provide credit facilities to their regular customers.

32. TYPES OF

33. Retailers are classified into two : ● Itinerent Traders ● Fixed shop retailers

34. ITINERANT TRADERS MEANING ● Retailers having no fixed place for business are called itinerant traders. ● They deal in vegetables, fish, fruits, household utensils etc... ● They operate on a small investment and with limited stock.

35. TYPES OF ITINERANT TRADERS

36. HAWKERS & PEDLARS HAWKERS Hawkers carry goods on wheeled carts or on bicycles

37. HAWKERS & PEDLARS PEDLARS Pedlars carry their products on heads or on shoulder bags

38. MARKET TRADERS Market traders sell their articles on fixed days in different market places. Eg: On every sundays.

39. STREET TRADERS These traders sell their goods at busy street corners or pavement near railway stations, bus stands, cinema houses etc... They deal in low priced products such as magazines, newspapers, stationary, towel etc...

40. CHEAP JACKS They do their business in rented shops or in sheds. They keep on shifting from one locality to another. But the change of place is not as frequent as in the case of hawkers and pedlars.

41. FIXED SHOP RETAILERS

42. FIXED SHOP RETAILERS ● Fixed shop retailers carry on business in fixed building either owned or rented. ● Fixed shop traders are of two types : - Small scale retailers - Large scale retailers

43. Small Scale Retailers

44. GENERAL STORES They sell general items of goods. They stock wide variety of goods required for day to day life like groceries, stationery, edibile oil etc...

45. STREET SHOPS Generally located at street corners. They display goods on a table, stand or on shelf. They deal in low priced goods like toys, story books, soft drinks etc...

46. Second Hand Goods Shop These retailers sell second hand goods such as Books, Furniture and other household items

47. Speciality Shops They specialise in a single product of a certain line. Eg : Shops dealing in Childrens book instead of all types of books, Kidswear instead of all type of garments etc...

48. Large Scale Retailers

49. Large Scale Retailers Large Scale retailers means the retail trade involving operations on a large scale and sale of goods in small quantities

50. Large Scale Retailers Different form of large scale retailers ● Departmental Stores ● Multiple Shops (Chain Stores) ● Mail Order Business ● Consumer Co-operative Stores ● Super Bazaar

51. DEPARTMENTAL STORES Departmental store is a large scale retail organisation consisting of many departments. Each department deals in one item (Books, Furniture, Footwear, Electronics, Sports items etc.. It is said that one can buy pin to piano from Department store.

52. Features of Departmental Stores

53. Features of Departmental Stores ● It is a large scale retail organisation ● A wide variety of products are available under one roof. ● Products are arranged in separate departments. ● No Credit - It deals in cash and carry basis. ● Door delivery.

54. Advantages of Departmental Stores

55. Advantages of Departmental Stores ● Central Location - Placed at centre of a town. So it attract large number of customers. ● Convenience to consumers - Customer can buy all requirements from one place. It saves time, expenses. ● Risk distribution - If there is loss in one department, it may be compensated by gain of other departments. ● Automatic mutual advertisement - One department advertises the other.

56. Disadvantages of Departmental Stores ● Heavy operational cost - High rent in cities, huge salary to specialised staff etc... increases operational cost. ● High prices - Due to high operating cost, price charged is slightly high. ● Location - Always situated in town and serves only a section of society. ● Lack of personal attention - They have to deal with a large number of customers daily. Hence not able to give personal attention to customers. ● Possibility of huge loss - Change in fashion, fluctuations in price etc.. will adversely affect the business, as they stock large quantity of goods.

57. MULTIPLE SHOPS [CHAIN SHOPS] A Multiple shop is a large scale retail organisation with a number of branches at different places under one ownership and management. Head office controls the branches through Branch Managers. They supply goods to the branches. Eg : Bata shoe stores

58. Features of Multiple Shops ● It is a large scale retail shop ● It operates through a large number of branches ● Each shop deals in same type of goods. ● Each shop is decorated in same style and layout. ● It generally sells goods on cash and carry basis ● It aims at elimination of middlemen. ● Goods sold are of durable nature.

59. Advantages of Multiple shop ● No bad debts - They sells goods on cash basis. Hence there is no bad debts. ● Transfer of goods - If a particular product has no demand at one branch, it can be transferred to another branch where it is in demand. ● Public Confidence - All branches sell standard goods at uniform price. ● No overstocking of goods - Since branches get their supply from head office as per requirements, there is no fear of overstocking of goods. ● Elimination of middlemen - By selling directly to consumers, it is able to eliminate middlemen in sale of goods.

60. Disadvantages of Multiple Shops ● Limited Choice - They deal in one brand. They cannot offer variety or choice. ● No personal touch - Multiple shops constitute a number of branch shops with paid employees who lacks personal touch. ● No credit facilities - Hence affects sales volume. ● Risk due to change in demand - Fall in demand due to change in fashion etc.. will lead to great loss to the shop.

61. DIFFERENCE BETWEEN DEPARTMENTAL STORE AND MULTIPLE SHOP

62. Sl. No. Departmental Store Multiple Shop 1 It offers wide variety of products It offers only limited line of products 2 3 4 5 6 7 More capital required to run different departments Free home delivery provided to customers Deals in products of various manufacturers It attracts customers belonging to higher income group No possibility of transfer of goods from one department to another Price of articles may be different in different departmental stores Less capital required No such services Deals in products of only one manufacturer It attracts all classes of customers Goods can be transferred from one branch to another as they deal in same type of goods Price is fixed in Multiple shops Risk is low as unprofitable branches 8 Greater risk is involved can be closed or shifted to other locality

63. MAIL ORDER BUSINESS A form of retailing where the business transactions are done through post (mail). Here post office plays an important role. Consumers get goods at their door steps without going to the shops.

64. MAIL ORDER BUSINESS Mode of operation ● Seller advertises their products in newspapers ● Prepares mailing list. Catalogues, brochures, pricelist etc.. to addressees. ● Interested customers send orders by mail. ● Properly packed goods are sent to customers by VPP (Value Payable Post). ● The goods will be received by Postal authorities ● The postman delivers them to addressees and collect payment and remits the money to retailer.

65. Advantages of Mail Order Business ● Convenience in buying - Customers get the required goods at their door steps through mail. ● Wider Market - Area of operation is not limited to a particular locality. ● Limited Capital Requirement - This type of business can be started with a small amount of capital because it does not require huge buildings, large stock of finished goods etc.. ● Elimination of middlemen - Elimination of middlemen saves a lot of money to buyers as well as to the seller.

66. Disadvantages of Mail Order Business ● No personal contact - There is no contact between buyer and seller ● No chance for inspection - Buyer does not get an opportunity to inspect the goods personally before buying. ● Not suitable for all items - Only limited type of products (Non-perishable goods like pen, books, toys, watches...) can be sold under this business ● Depends on postal services - Success of this business depends on availability of efficient postal services at a place

67. Consumer cooperative Stores A consumer co-operative store is a retail store formed and run by consumers on co-operative principles. It aims to eliminate middlemen. They deal in all types of consumer goods like grocery, stationery, utensils,medicines etc... They purchase goods in bulk from producers and sells in small quantities

68. Advantages of Cooperative Stores ● It is easy to form. Any 10 people can come together to form a cooperative store on the basis of cooperative principles. ● It provides consumer goods at lower prices by eliminating middlemen ● No possibility of bad debts as goods are sold on cash basis ● Cooperative stores are generally opened at convenient public places.

69. Disadvantages of Cooperative Store ● Lack of Initiative ● Shortage of Funds ● Lack of business training

70. SUPER MARKET [Super Bazaar / Self Service Store] Super Market is a large scale retail store selling a wide variety of consumer goods. They deal in consumer products such as grocery, utensils, electronic appliances etc...

71. Features of Super Market ● Buyers can purchase different products under one roof. ● Absence of salesmen ● Goods are sold on cash basis only. ● Super Markets are generally located at central locations to secure high turnover.

72. Advantages of Super Market ● Consumer can buy their requirements from one place. ● Super markets keep a wide variety of goods. It enables the buyer to make better selection. ● No bad debts as the sales are on cash basis. ● Super markets are generally located at suitable places within the reach of buyers.

73. Disadvantages of Super Market ● Credit facilities are not provided. It lowers the turnover. ● Super market works on the principle of Self- service. So customers do not get personal attention. ● Some customers handle the goods kept in the shelf carelessly. ● Running a supermarket requires huge investment.