Commerce flow chart

Trade refers to the buying and selling of goods and services with the aim of generating profit. It is the basic commercial activity that involves the exchange of goods for other goods (barter) or for money. A person who carries out trade is called a Trader.

Main branches of trade:

1. Home trade
2. International trade (foreign trade)

This is the buying and selling of goods and services within the same country. It involves trading activities that happen inside national borders.

Branches of home trade:

1. Retail trade
2. Wholesale trade

Retail trade

Retail trade is the buying of goods from producers or wholesalers and selling them in small quantities to the final consumer.

Wholesale trade

Wholesale trade is the buying of goods in large quantities from producers or manufacturers and selling them in smaller quantities to retailers.

This is the exchange of goods and services between one country and another.

Types of international trade:

1. Export trade
2. Import trade

Export trade: This is the selling of goods and services to other countries.

Import trade: This is the buying of goods and services from other countries.

Cargo ship arriving at a port of Zanzibar with imported goods

Aids to trade are services that support and make trade easier and more efficient. They help in the smooth flow of goods and services from producers to consumers.

Examples of aids to trade:

1. Transportation: This is the movement of goods and people from one place to another, especially from production areas to consumption areas.

2. Communication: This is the transmission of information from one person or place to another.

   

   Entrepreneurs communicating with their customers through mobile phone

3. Warehousing: This refers to storing goods until they are needed. Warehouses ensure that goods are available when and where required.

   

   A warehouse for crops storage

4. Banking/Finance: This involves providing money and credit to support the buying and selling of goods.

   

   An example of ATM

5. Insurance: This provides protection against risks such as fire, theft, or damage.

6. Advertising: This is the process of making goods and services known to the public, encouraging people to buy them.