Internal Trade

CLASS 11
BUSINESS
 NOTES
INTERNAL TRADE

Trade Buying and selling of goods and services for earning profit

Internal trade - trade which takes place within the geographical Border
of a country is known as Internal trade / Home trade or Inland trade.

Payment in
home currency No custom duty
is involved Goods are part of
production as consuption

Types of internal trade

Wholesale Retail

Wholesale trade It refers to buying and selling of goods and services

in large quantity for the purpose in resale or intermediate use

CLASS 11 BUSINESS
 NOTES
INTERNAL TRADE
They buy goods from manufacture in bulk and sell them in small
lots to the retailer.
The person involves in it is known as wholesaler.
They are generally specialized in one line of product
Example -medicine wholesaler, stationary wholesaler etc.
The profit margins of wholesaler is quite low.
(As they earn from selling in bulk )

Manufacturer Retailer Customer

Wholesaler

Services provided by the wholesaler

TO MANUFACTURER
Helps in large scale production ( as they buy in huge quantity )
Risk sharing
Expert opinion (about customers demand)
Financial assistance (make cash payment of orders)
Helps in distribution
Storage
Facilitates contineous production .

CLASS 11 BUSINESS
 NOTES
INTERNAL TRADE

To Retailers
Availability of goods.(as retailers can’t approach different
manufacturers)
credit facility
Specialised knowledge (direct from manufacturers)
Marketing support (they performs various marketing and sales
promotion activities which increases demand in market.
Risk sharing

Retail trade - It refers to the sale of goods in small lots to the final
consumer. they deal in variety of products which is being purchased
from different wholesalers and sell them to the final consumer.

Wholesaler Consumer

Retailer

CLASS 11 BUSINESS
 NOTES
INTERNAL TRADE
Retailer can operate from a shop, from television, from phone, or
directly from door to door.
They buy and sell in small quantities.

Services provided by retailers

To consumers To wholesalers or
Availability of goods manufacturer
different variety
Helps in distribution
New product information
Helps in promotion
Home delivery
personal selling
After sales service
correct feedback
convenience in buying
(Available nearby or at market)
Credit facility (if available)

Types of retailers

itinerant retailers Fixed shop retailer

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CLASS 11 BUSINESS
 NOTES
INTERNAL TRADE

1. Itinerant Retailers
No fixed place for selling.
They keep moving from place to place.
Deals in low price and non-standard items.
Basically sells daily use items which requires small investment.

Types of Itinerant
Hawkers and peddlers
Oldest form of retailers in the market place.
Moves from street to street /trains / Bus, etc.
Carry goods on wheeled carts or on animals - Hawker
whereas, peddler carries on his own Back / head.
They provides non- Branded & local items.
provides fruit, vegetables, toys, Bangles, wollen clothes, door step supply.

(ii) Market traders (periodic]

Sell goods on fixed days/dates at different places.
Example - Sunday Bazaar, Monday mart etc.
deals in low price and low Quality goods.
set up temperory shops on special occasion like Holi, diwali etc.

CLASS 11 BUSINESS
 NOTES
INTERNAL TRADE
(iii) Street traders (payment vendors)
They are the retailers who displays their articles on busy streets
corners, Bus - stands, Railway stations etc.
They generally deals in consumer items of daily use
Example - Newspaper, garments, eatables etc.
They do not change their place of business frequently.

(iv) Cheap Jacks

They are the retailers who display their goods in hired shops or in
tents for a temporary period different localities.
They keep on Changing their business from one locality to other.
Example - people on road side selling lights on diwali, colours on holi
,dandiya on Navratri etc.

2. fixed shop retailers

They have a fixed place of sale.

small scale large

scale

CLASS 11 BUSINESS
 NOTES
INTERNAL TRADE
(i) Small Scale fixed Retail shops
Most common form
Mostly situated in localities

(A) General Stores

deals in items of daily use (groceries, stationary, make-up, etc)
large variety in each line of products.
often provide credit facility to daily customers.

(B) Speciality Stores

Becoming more popular in urban areas.
Deals with one line of products.
Ex Stationery line, garment lines, shoes, medicine etc.
Generally situated in market place.
They provide a wide choice in a specific line of products.

(c) Street Shops/ Stall holders

Shops are situated at street crossings or on main roads.
Temporary platforms to display goods for sale.
Shops have very limited space.
Attract floating customers and deals in cheap goods
like - toys, cigarettes, soft drinks etc.

CLASS 11 BUSINESS
 NOTES
INTERNAL TRADE
(d) Second hand goods shops
Deals in second hand /used items.
Ex-Books, furniture etc.
Goods are sold at lower prices.
May also stock rare objects / antique items.

(e) Second Shops

They self goods which are not produced acc. to the required
specifications
(have some minimum defect)
New -Defective goods
Sold at heavily discounted price.

(ii) large Scale-Fixed Retail Stores

Requires huge investment.
Use large size showrooms to sell goods.
Located at central place or in shopping centers.

(A) department stores

They are the huge retail showroom having to a number of
departments under one roof each department specializing in one
line of product.
each department is like a separate shop with centralised
purchasing, selling & Accounting.

CLASS 11 BUSINESS
 NOTES
INTERNAL TRADE

(A) main features

1. Huge size.
2.Wide Range of products.
3. Centralised purchased.
4. elimination of middlemen
5. Services (provides variety of Add services like free home delivery,
packing, restaurant etc.)
6. Central location.
7. Advertising (large scale advertisement)

(B) Chain Stores/Multiple shops

It refers to a number of identical retail shops located in different parts
that are owned and controlled by a single organisation.
Ex Lenskart out let in your city, Bata Stores, etc.

(A) Features
large size
Uniform infrastructure
Uniform prices
Centralised purchasing
Standardised /uniform Quality.
No middlemen

CLASS 11 BUSINESS
 NOTES
INTERNAL TRADE
(C) Mail order Retailing
Under this type of retailing, sellers contact the potential Buyers
through advertisement and mail publicity.
They send catalogues, price list, samples etc. and the customer is
required to place their order by post.

(d) Automatic Vending machines

New form of retailing
It is a machine operated by coins / tokens
They are used to sell pre-packed and low-cost products, eg... Soft
drink, cigarettes, packed milk etc.
Buyer inserts a coin or token in the machine and receives a
specific Quantity of product from the machine.
No sales man is required in such machine

G.S.T - goods and service tap

one nation one tax".
Introduced in India with effect from July 2017.
Majority of indirect taxes (VAT, Service tax exicse duty etc) are now
merged into GST.
It eliminate the need of filing multiple returns and assessments
which simplifies the tax filing producer for producers.
G.S.T is a destination based single tax on supply of goods &
services. ie.. the burden of tax is paid only by the end consumer. all
the other middle man will get their Input back. (Input tax credit)
Therefore, it is a tax on value Addition only.

CLASS 11 BUSINESS
 NOTES
INTERNAL TRADE

Features of G.S.T
It applies in whole country (All States + union territories )
It is a Destination based consumption tax. (taken from the end
consumer who used it for Consumption)
there are 4 tax slabs 5%, 12%, 18% and 28%

Structure of GST
GST

IGST
(inter state)
SGST/UT GST
GST
(State GST) / [union
(Central GST)
territory GST)

(Intra-State sale) interstate

apply on sales / purchase sale Jaipur
mode within the state . (Rajasthan) to
ajmer to jaipur agra (U.P)
(both are in raj. )
if G.S.T rate is 12%
Ex - if g.s.t Rate is 12% IGST -12%
(GST-6%)
SGST - 6%

CLASS 11 BUSINESS
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INTERNAL TRADE CLASS 11
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