What do you mean by Trade? What are the different aids to Trade?

Trade is the activities concerned with the buying and selling of goods and services. The objectives of trade is to make the goods available to those persons who need them and are willing to pay for them. Trade is classified into to broad categories:

  1. Internal trade
  2. External trade

Aids to Trade:

Activities that facilitate the smooth and uninterrupted flow of goods and services from the producers to the consumers are termed as the aids to trade. They are as follows:-

1. Transportation

Generally all goods are not consumed at the same place as they are produced, hence, they need to be moved from the place of production to where they are in demand. This is what we term as transportation. Transportation may be via Land transportation (Road or Rail), Air transport (Airplanes) or Water transport (Boats or Ships).

2. Warehousing

Usually, good are not sold or consumed immediately after their production and are held in stock till such time they are needed . In such cases special arrangements are needed for storage of goods to prevent damage or loss. Warehousing helps the business firms to overcome the problem of storage and facilitates the availability of goods as and when required! Prices are thereby maintained at reasonable rate through continuous supply of goods.

3. Insurance

Business involves various risks. Factory buildings, machinery, furniture, data etc need to be protected against fire, theft, natural calamities and many other threats. Materials and goods, in transit or in stock are subjected to risk of loss or damage. Employees are also required to be protected against the risk of occupational hazards and accidents. Insurance provides financial protection in all such cases. On payment of a nominal premium , the amount of loss or damage and compensation for injury, if any , can be recovered from the insurance agency.

4. Advertising

It is one of the most important methods of promoting the sale of products and services, particularly consumer goods (Electronics, automobiles, Soaps etc.). Most of these goods are manufactured and supplied in the market by numerous firms – big and small. It is practically impossible for traders and manufacturers to contact each and every customer. Thus for sales promotion and information about the goods, their pricing, features , quality etc., to reach the potential buyers,  advertising is essential!

Be the first to comment on "What do you mean by Trade? What are the different aids to Trade?"

Leave a comment

Your email address will not be published.


This site uses Akismet to reduce spam. Learn how your comment data is processed.