Trade

Trade can be defined as the act of buying and selling of goods and services. Trade involves two set of people which are the buyer and the seller of goods and services.

Trade involves the exchange of goods and services between a seller and a buyer. The exchange is always is always at an agreed price and within a period of time.

1. Importance of Trade

Trade is important because:

1. It is a means of easy exchange of goods and services
2. It makes a person gets what he/she needs
3. It makes a good transport system possible as this is needed for trading
4. Trading involves other activities that makes the country grow
5. Trade makes it possible for people to satisfy their wants
6. Forms of Trade

Trade can be classified into two forms. They are:

1. Home Trade: Home trade is also known as the domestic trade. It is the buying and selling of goods and services within the country. It involves the use of home or domestic currency. Example is buying cloths in Lagos and selling them in Porthacourt .Home Trade can be classified into retail and wholesale trade.
2. Foreign Trade: Foreign trade is the trade between two or more companies. It is the same as international trade. Example is the trade between Nigeria and United States of America (U.S.A). Foreign trade involves the use of different currencies and language. Foreign trade can be classified into :

• Import: It involves the bringing in of goods made in one country into another country. Example: Nigeria imports cars, machines from Britain.
• Export: It is concerned with the selling of goods to other countries either raw materials or finished goods made in one country. Example: Nigeria sells or exports cocoa, crude oil and other raw materials to U.S.A, Japan
• Entre port: It is the re-exporting of goods imported from one country to another without adding any value to it. Example: Nigeria import cars from Japan and export it to Ghana.

Aids to trade: Aids to trade are the services that make trade easy to carry out. Examples are Banking, insurance, Advertising, Warehousing, Transportation etc.

Banking: This is the process of keeping money or other valuables for use at any time. The banks act as payment agent. They are lenders to the financial system because they provide funds for use by businessmen and women.

Insurance: Insurance is a process of passing risk and its effect from the insured (the person) to the insurer (the insurance company) Insurance ensures that the effects of risk in business are not too much on the insured businessman or woman.

Advertising: Advertising brings the consumer and the manufacturer together. It is a process of making all the goods that are available for sale s to create consumer awareness. Advertising helps business a the information gathered by the consumers help them to make decision about the purchase of needed goods/

Warehousing: Warehousing is a process of keeping goods safe till the time it will be needed by the consumer or the buyer. Warehousing helps the businessman to plan appropriately on purchases and what to buy later. Warehousing helps to guide against wastage and provides a mean through which goods produced now are kept for later consumption.

Transportation: Transportation is a process of moving goods from the manufacturer to the place of consumption. The process of trade is not complete until the goods produced get to the final consumer.

Test and Exercise

1. ————– is the act of buying and selling of goods and services (a) market (b) trade (c) home trade (d) entre port
2. Another name for home trade is (a) domestic trade (b) international trade (c) oversea trade (d) Nigeria trade
3. Foreign trade can be classified into all the following except (a) import (b) export (c) entre port (d) multi port
4. The trade within the same country is the (a) home trade (b) foreign trade (c) international trade (d) oversea trade
5. One of the importance of trade is (a) it makes stealing easy (b) cheating becomes easier (c) It makes a person gets what he/she needs (d) opportunity to travel all over the country