Internal Trade

Internal trade means the buying and selling of goods and services within the boundaries of a nation. It is trade carried on inside the country, so no custom duty or import duty is levied on it.

The main characteristics of fixed shop retailers are:

- They have a permanent place of business and do not move from place to place.
- Compared with itinerant retailers, they usually have greater resources and operate on a relatively large scale.
- They may deal in different kinds of products, including both consumer durables and non-durables.
- They enjoy greater credibility in the minds of customers.
- They can provide more services to customers such as home delivery, guarantees, repairs, credit facilities, and availability of spares.

Wholesalers provide warehousing facilities so that goods can be stored after production until they are needed by retailers or consumers. This serves two purposes:

- It reduces the burden on manufacturers of maintaining storage facilities for finished goods.
- It provides time utility, because goods are available when demanded, not just when produced.

Thus, warehousing helps in the smooth and continuous distribution of goods.

Market information collected by wholesalers benefits manufacturers because wholesalers are in direct contact with retailers and can tell manufacturers about:

- customers’ tastes and preferences,
- market conditions,
- competitive activities, and
- features preferred by buyers.

This helps manufacturers make better decisions about production, design, pricing, and marketing.

Wholesalers help manufacturers in availing the economies of scale by collecting small orders from many retailers and passing them on as a bulk order to the manufacturers. Because of this:

- manufacturers can produce on a large scale,
- per-unit cost of production falls, and
- they can use resources more efficiently.

So the wholesalers’ bulk purchasing supports large-scale production.