Trade is a special activity of people associated with the implementation of acts of purchase and sale and is a set of specific technological and economic operations aimed at servicing the exchange process.
The social division of labor and the allocation of commercial capital from the general industrial capital made trade a separate independent branch of the economy and economy.
Trade gives about 20% of the growth of the gross domestic product. According to the rating of Organized Trade in 2006, our country was second only to India, and the indicator of “market attractiveness” of Russia was the best in the top five of the rating.
What is trade?
Trading is the core business of all investors or investment groups. In other words, it is buying, selling, or exchanging assets. In financial markets, people trade securities such as stocks, currencies, commodities, or derivatives.
Stocks are traded on the financial exchange, while commodities and equity can be bought and sold on the trading floor. The main goal is to make a profit by buying at a lower price and selling at a higher price, usually within a relatively short period of time.
A trader can be either a private investor or a global financial institution. You can trade directly or through a broker, in person, by phone, or on an online trading platform.
Main trading functions
realization of the produced use-value (goods). The fulfillment of this function creates an economic prerequisite for the reproduction of the aggregate social product and connects production with consumption;
bringing consumer goods to consumers. It is due to trade that the spatial movement of goods from producers to consumers occurs, and in trade, production processes in the sphere of circulation continue (namely, transportation, storage);
maintaining a balance between supply and demand. At the same time, trade actively influences production in terms of the volume and range of goods produced;
reduction of distribution costs in the sphere of consumption (costs of buyers for the purchase of goods) by improving the technology of sales, information services, etc .;
functions related to the implementation of marketing, namely: market research, price determination, creation of service services, product development, etc.
Trade is divided into two types
Wholesale trade is any activity for the sale of goods and services to those who purchase them for the purpose or further use (processing, sewing), or resale. Therefore, in the wholesale trade, goods are purchased in large quantities and in large volumes.
Retail trade is a special activity of people associated with the implementation of the act of purchase and sale of goods to end consumers. This activity is a set of specific technological and economic operations aimed at servicing the exchange process and is the final link in the movement of goods in the sphere of circulation.
In most developed economies, the ratio of the number of retail trade enterprises to the population size is much higher than that existing in Russia. For example, in the United States there is one retail business for 122 people, in Japan for 69 people, and in South Korea for 42 people. In Russia, a store or a kiosk has 400 people. The same picture is with the “equipment” of the population with retail space. These circumstances open up a wide field of activity for entrepreneurs. They can and should make efforts to increase the quantity and quality of the retail network.
Where have you heard about trading?
Trading activity in financial markets is often viewed as an indicator of the health of the global economy. People may ask you if you are trading, share your own successes or failures in trading.
What you need to know about trading
It is not difficult to set up an online trading account and start selling stocks. All you need is a password and a certain amount in your account. You can also participate in trades by phone or through a stockbroker.
To take part in the auction, select the desired financial instrument, look at its price, decide how much you are willing to spend, and conclude a deal when the quote suits you. You can then track your investment performance or add more assets to your growing portfolio. If you make a profit from the sale of shares, then you may need to pay tax.
Remember that the value of securities and exchange commodities can not only rise but also fall, so you can also lose money in trading.
Trade and its types
Summary of the paragraph. Trade is an organizationally separate market form of a material universal logistic process, that is, the process of delivering products from producer to consumer.
Trade is the unity of buying and selling. A purchase is an exchange of money for a commodity, and the market participant who purchases is called a buyer. Sale is the exchange of goods for money, and the market participant who sells is the seller. Trade is the relationship between sellers and buyers.
A trader is a professional market participant whose commercial activities are primarily concentrated in the field of trade. Currently, traders are predominantly legal organizations rather than citizens.
Distinguish between wholesale and retail trade. The economic difference between them is that in the wholesale trade, the value of the goods only changes its owner, but continues to exist. In retail, a change in the owner of value leads to its complete disappearance. The differences between wholesale and retail trade are expressed in the fact that wholesale trade is usually trade in large quantities of any kind of goods; wholesale buyers are mainly manufacturers of products and trade organizations themselves. Retail trade – trade mainly in consumer goods through various kinds of stores and buyers in it are, as a rule, citizens, and not legal organizations.
Trade concept. Recall that logistics is the process of delivering products from its manufacturer to the consumer as a two-pronged concept that unites delivery as a material process, consisting of the movement (transportation) of products, accompanied by temporary stops (processes
storage), and as a market process, i.e., the movement of products as the embodiment of value (materialized human labor).
The movement of products, viewed from the point of view of the value embodied in it, is trade.
For an individual market participant, primarily a manufacturer or consumer of products, the logistic process is always one or another unity of three components – transportation, storage, and sale and purchase of products. But due to the division of labor, these components of a single logistic process also exist separately from each other in the form of independent spheres of activity: transport and storage facilities, as well as trade, which provide corresponding paid services to all market participants as participants in the logistic process.