Business Studies Notes

Aid to Trade


  • Meaning of Aids to Trade
  • Listing of Aids to Trade
  • Functions of Aids to Trade


By the expression “Aids to Trade” we mean those things or agents that make trade to grow . The aids to trade make trade easy and for this reason they are called aids to trade or factors of trade or auxiliary to trade.


These aids to trade are:

  1. Insurance
  2.  Banking
  3. Transportation
  4. Warehousing
  5. Advertising
  6. Communication and
  7. Tourism


The functions of above aids to trade are as follows:

  1. Insurance: insurance covers risks. It is an aid to trade because it encourages business men to take risky business ventures.
  2. Banking: the two main functions of a bank is to save money and lend money. This money accepted and saved for costumers are lent to businesses as capital. In this way the bank is an aid to trade .
  3. Transportation: transport helps trade by moving goods from one place to another. For example it moves goods from where they are surplus to where they are scares.


  1. What is the importance of transportation in business?
  2. How can insurance serve as an aid to trade?
  • Warehousing: this is concerned with storing goods in safe condition until they are demanded. Therefore, warehousing prevents scarcity of goods.
  • Advertising: this is the activity that is concerned with informing members of the society that a particular good or service exists, its quality and function. Advertising is an aid to trade because it creates an awareness and demand for goods and services.
  • Communication: this is a form of interaction (i.e. discussion), letter, telephone etc between buyers and sellers with the intention to sell or buy. An example is a letter of  enquiry about the goods available in the warehouse
  • Tourism: this covers all the activities which make someone on tour to be comfortable examples of activities under tourism are good hotel accommodation, tourists centers etc. tourism assists trade because tourists from foreign countries bring foreign currency into the economy


  1. What do you understand by “aids to trade”?
  2. List the aids to trade you know


Business Studies for J.S.S1 by O.A. Lawal and other pages 15-16


  1. The following are aid to trade except (a) advertising (b) insurance (c) banking

(d) manufacturing

  • Aids to trade can also be called (a) auxiliary to trade (b) friends of trade (c) foreign trade (d) home trade
  • Banking is an aid to trade because (a) it keeps a lot of money (b) bank managers are in commercial occupation (c) many banks works on Saturday (d) it can save and lend money to various traders
  • Warehouse is useful to trade because (a) it is a means of keeping goods until they are demanded (b) it causes scarcity of goods (c) it can lead to inflation (d) it moves goods from one place to another
  • Insurance is useful to trade because (a) it links buyers and sellers together (b) it moves goods from point of production to where they are demanded (c) it prevents scarcity (d) it encourages businessmen to undertake risky business


  1. List the seven aids to trade.
  2. Explain two of the aids listed in question one above


  1. What is trade?
  2. Who is a trader?
  3. Draw the division of trade
  4. What is home trade?
  5. Mention traders who are involved in home trade

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