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This chapter deals with trade that happens within the boundaries of a country. It explains the meaning of internal trade, its features, types of internal trade (wholesale and retail), and the role played by wholesalers and retailers. The notes given below cover every point from the latest NCERT textbook simply and systematically so that you can revise the entire chapter quickly before your exams. You can also download the free PDF for quick revision.
Contents
Explore Notes of Class 11: Business Studies
Introduction
Trade is an integral part of commerce. When buying and selling of goods and services takes place inside the domestic boundaries of a country, it is known as internal trade or domestic trade. Payments are made in the home currency, and there is no involvement of customs duties or import-export formalities.
Meaning and Characteristics of Internal Trade
Internal trade refers to the exchange of goods and services within the geographical boundaries of a country. Here are the key features of internal trade:
1. Trade takes place between buyers, sellers, and producers located in the same country.
2. Goods are bought and sold in the domestic currency (in India – Indian Rupees).
3. No customs duties or import/export duties are levied.
4. Transport distances are comparatively shorter.
5. There is free movement of goods and people across different states/regions because of uniform laws and regulations.
6. It helps in the equal distribution of goods across the country.
Types of Internal Trade
Internal trade is broadly classified into two categories:
1. Wholesale Trade: Buying goods in large quantities from producers and selling them in smaller lots to retailers or industrial users.
2. Retail Trade: Buying goods either from wholesalers or directly from producers and selling them in small quantities to the ultimate consumers.
Wholesale Trade
A wholesaler acts as a vital link between the producer and the retailer. He buys goods in bulk and sells them to retailers for further resale. Wholesale traders basically offer services to manufacturers or directly to retailers, which are mentioned below:
Role/Services Offered by Wholesalers to Manufacturers
These are the services offered by wholesalers to manufacturers:
1. Enables large-scale production by buying goods in huge quantities.
2. Bears the risk of price fluctuations, theft, damage, etc.
3. Provides valuable market information and feedback to producers.
4. Helps in the storage and warehousing of goods.
5. Facilitates distribution by maintaining stock near markets.
6. Offers financial assistance by making advance payments or buying on credit.
7. Assists in marketing and promotion of new products.
Services Offered by Wholesalers to Retailers
These are the services offered by wholesalers directly to retailers:
1. Provides a wide variety of goods in one place, saving the time and effort of retailers.
2. Grants trade discounts and credit facilities.
3. Helps retailers with specialised knowledge about goods.
4. Bears risks related to storage and transportation.
5. Ensures regular and timely supply of goods.
6. Assists retailers in product promotion.
Retail Trade
Retail trade involves selling goods in small quantities directly to the final consumer for personal use or non-business use. In simple words, when you buy milk, clothes, a mobile phone, or groceries from a shop, mall, online store, or even a roadside vendor for your own use (not for reselling), that is retail trade.
Services Offered by Retailers to Consumers
Let’s look into the services offered by retailers to consumers:
1. Wide variety of products under one roof.
2. Convenience in location and long working hours.
3. Provides personal attention and after-sales services.
4. Offers home delivery and credit facilities in some cases.
5. Supplies goods in small quantities as per consumer needs.
6. Keeps consumers informed about new products and market trends.
7. Acts as a link between wholesalers/producers and consumers.
Services Offered by Retailers to Wholesalers/Manufacturers
In this section, let’s look into the services offered by retailers to consumers:
1. Helps in reaching the final consumer.
2. Provides valuable market feedback.
3. Assists in promotion and demonstration of products.
4. Enables wider distribution of goods.
5. Bears risks of last-mile storage and pilferage.
6. Helps manufacturers in forecasting demand.
Also Read: NCERT Class 11 Sociology Chapter 3: Understanding Social Institutions Notes (Free PDF)
Types of Retail Trade
Retail trade is mainly divided into two categories:
1. Itinerant Retailers (Mobile Traders): These retailers have no fixed place of business. They move from place to place to sell goods.
Features and examples of Itinerant Retailers are:
- Operate with limited resources and small investment.
- Deal in daily-use, low-priced consumer items.
- Provide direct contact with customers and flexible timings.
Types of itinerant retailers:
1. Peddlers and Hawkers: They carry goods on their heads, by bicycle, or handcart (fruits, vegetables, clothes).
2. Market Traders: They set up stalls on different days in different markets or at fairs/melas.
3. Street Traders (Pavement Vendors): They occupy busy street corners, footpaths, bus stands, etc.
4. Cheap Jacks: They have small independent shops that keep shifting locations frequently.
2. Fixed Shop Retailers: These retailers operate from a permanent, fixed location. They are further divided into:
A. Small-Scale Fixed Shop Retailers
1. General Stores: They sell a wide variety of daily-need items (groceries, stationery, toiletries).
2. Speciality Shops: They concentrate on one line of products (e.g., sweets shop, book shop, medicine shop).
3. Street Shops: They are located in residential areas; sell mostly daily-use items.
4. Second-Hand Goods Shops: These people deal in used goods like books, furniture, and clothes at cheaper rates.
B. Large-Scale Fixed Shop Retailers
1. Departmental Stores: They are large establishments with many departments (clothing, electronics, cosmetics, etc.) under one roof. These stores are usually located in central areas, beautifully decorated, and offer many facilities (restaurants, restrooms). Examples: Lifestyle, Shoppers Stop, Pantaloons.
2. Chain Stores or Multiple Shops: These are the network of identical-looking shops located in different localities, selling the same range of products. It has centralised purchasing, uniform pricing, same decoration. Examples: Reliance Smart, Big Bazaar, Vishal Mega Mart, Bata.
3. Franchise: A Franchise is the agreement between the franchiser (owner of the brand) and the franchisee (local person). Franchisee sells goods/services under the franchiser’s name and follows their policies. Examples: McDonald’s, Pizza Hut, Lakmé Salon, Apollo Pharmacy.
4. Mail Order Houses: These houses sell goods through mail/post; no personal contact with customers. They are suitable for goods that can be easily described and transported.
5. Consumer Cooperative Stores: These stores are formed by a group of consumers to eliminate middlemen and provide goods at lower prices. They are managed democratically, and profits are distributed as dividends. Example: Kendriya Bhandar, Apna Bazaar, Super Bazar.
6. Super Markets: These are the large, self-service retail stores selling a wide variety of food items, groceries, household goods, etc. It offers low prices, self-service, spacious layout. Examples: Big Bazaar, Spencer’s, D-Mart, Reliance Fresh.
7. Vending Machines: Vending machines are coin or card-operated machines that dispense products automatically (cold drinks, snacks, newspapers, tickets).
Important Definitions in NCERT Notes Class 11 Business Studies Chapter 10: Internal Trade
This section lists key terms for clarity and revision:
- Internal Trade: Buying and selling of goods and services within the boundaries of a country.
- Wholesale Trade: Buying goods in bulk from producers and selling them in smaller lots to retailers.
- Retail Trade: Sale of goods in small quantities to the ultimate consumer.
- Itinerant Retailers: Retailers without a fixed place of business.
- Departmental Store: Large retail store offering a variety of goods arranged in different departments.
- Chain Stores: A number of similar retail shops owned by the same firm and located in different localities.
Explore Solutions of Class 11: Business Studies
Related Reads
Explore Notes of Other Subjects of NCERT Class 11
FAQs
Wholesale trade involves bulk purchase from producers and sale to retailers, while retail trade involves the sale of goods in small quantities to final consumers.
Four types of Itinerate retailers are peddlers & hawkers, market traders, street traders, and cheap jacks.
Departmental stores are large retail shops with separate departments for different products (clothing, groceries, electronics, etc.) under one roof, offering a wide variety and services. Examples: Spencers (Chennai), Akberally (Mumbai).
A franchise is a business arrangement where one party (franchiser) allows another party (franchisee) to use its brand name and business model for a fee.
General stores or nearby small fixed shops because they provide a quick and regular supply.
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