The Forms of Trade

Trade can be carried out in different forms, while some are carried out within the territorial boundaries of a country, others involve more than one country.

Trade can be broadly classified into two, namely:

1. Home trade.
2. Foreign trade.

1. Home Trade:

Home trade is concerned with the buying and selling of goods and services, produced within a country, to satisfy the wants of consumers. Home trade is also referred to as internal or domestic trade.

Home Trade can be subdivided into two:

• wholesale trade
• and retail trade.

a. Wholesale Trade: Wholesale trade involves buying in bulk/large quantities from producers or manufacturers, and selling in small quantities to retailers.

b. Retail Trade: Retail trade involves buying in small quantities from the wholesaler, for resale to the final consumers.

Foreign Trade:

Foreign trade, otherwise called international trade, is a trade involving two or more countries.

Foreign trade can be sub-divided into three;

a. Import.
b. Export.
c. Entrepot.

a. Import: This involves buying goods produced in foreign countries and bringing them into our own country. Nigeria imports goods like cars, television sets, laptops, etc.

b. Export: This is the direct opposite of import. It involves selling locally produced goods and services, to other countries in need of them. Nigeria is a major exporter of crude oil. Other exported goods include cocoa, cassava, groundnut, etc.

c. Entrepot: This involves the re-exporting of goods already imported into a country.

The diagram below illustrates the two main types of trade and their subdivisions.