Wholesale and Retail Trade

Wholesaling is a part of marketing system. It provides channels of distribution which help to bring goods to the market.

Wholesales is often a field of small business, but there is a growing chain movement in the western countries.

About a quarter of wholesaling units account for the one-third of total sales.

Two-thirds of the wholesaling middlemen are merchant wholesalers who take title to the goods they deal with. Wholesalers simplify the process of distribution.

Retailing is selling goods and service to the ultimate consumer.The retailer is the most expensive link in the chain of distribuyion. The retailers operate through stores, mail-order houses, vending-machine operators.

The retailer performs many necessary functions. First he may provide a convenient location. Second, he often guarantees and services the merchandise he sells. Third, the retailer helps to promote the product through displays, advertising or sales people. Fourth, the retailer can finance the customer by extending a credit. Also the retailer stores the goods in his outlet by having goods available.

The wholesale trade sector comprises establishments engaged in wholesaling merchandise, generally without transformation, and rendering services incidental to the sale of merchandise. The wholesaling process is an intermediate step in the distribution of merchandise. Wholesalers are organized to sell or arrange the purchase or sale of (a) goods for resale (i.e., goods sold to other wholesalers or retailers), (b) capital or durable nonconsumer goods, and (c) raw and intermediate materials and supplies used in production. Wholesalers sell merchandise to other businesses and normally operate from a warehouse or office.

The retail trade sector comprises establishments engaged in retailing merchandise, generally without transformation, and rendering services incidental to the sale of merchandise. The retailing process is the final step in the distribution of merchandise; retailers are, therefore, organized to sell merchandise in small quantities to the general public. This sector comprises two main types of retailers: store and nonstore retailers.

Money

Money is a very important factor in the economy and economics. Goods are produced to be sold. They are sold to meet the needs of consumers or customers. Services are rendered to make life easier/ People earn money to be able to pay for both goods and services / Banks cannot operate without money / That is why people say that Money makes the world go round /

Money has three basic function / It serves as a medium of exchange as a measure of relative value and as a store of value/

As a medium of exchange money enable two individuals to exchange without having to barter/ In a barter economy you must find someone who has what you want. In a money economy people can sell what they have to anyone, then use the money to buy what to buy what they want. Exchanging labour for goods and service is much easier.

A measure of value. Money indicate the relative value of products and resources. When money used in exchange, each product or resources has a single money price. People can compare money prices to find the best value for what they are selling or buying. Money makes exchange easier.

As a store of value money makes it possible for us to use the value of something that we sell today to make a purchase some time in the future. We save its buying power for future use. Money is completely liquid which means that it can be converted into goods and services without any inconvenience or cost.

Types of money Some of the major types of money are:

1. Commodity Money:
Whenever any commodity is used for the exchange purpose, the commodity becomes equivalent to the money and is called commodity money. There are certain types of commodity, which are used as the commodity money. Among these, there are several precious metals like gold, silver, copper and many more. Again, in many parts of the world, seashells (also known as cowrie shells), tobacco and many other items were in use as a type of money & medium of exchange.

2. Fiat Money:
The word fiat means the " command of the sovereign. It is the type of money that is issued by the command of the sovereign. The paper money is generally called as the fiat money. This type of money forms a monetary standard. It has been made mandatory by law to accept the fiat money, as an exchange medium, whenever it is offered to anyone.

3. Fiduciary Money:
Today's monetary system is highly fiduciary. Whenever, any bank assures the customers to pay in different types of money and when the customer can sell the promise or transfer it to somebody else, it is called the fiduciary money. Fiduciary money is generally paid in gold, silver or paper money. There are cheques and bank notes, which are the examples of fiduciary money because both are some kind of token which are used as money and carry the same value.

Commercial Bank Money:
Commercial Bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by cheque or cash withdrawal without giving the bank or financial institution any prior notice.