Chapter 2 Trade Solutions

Group A

Group B

(a) Departmental store

(5) Huge capital

(b) Market traders

(3) Business on market day

(c) General shops

(4) Most common shop

(d) One price shop

(2) Uniform price

(e) Peddlers

(1) Carry goods on heads

Group A

Group B

(a) Import trade

(1) First step in import

(b) Registration

(2) Goods not for own country

(c) Entrepot trade

(3) Buying goods from other country

(d) Letter of Credit

(4) No restrictions

(e) Large Turnover

(5) Selling goods to other country

(6) Credit worthiness of importer

(7) Recovery of dues

(8) Wholesaler

(9) Retailer

(10) Credit worthiness of exporter

Group A

Group B

(a) Import trade

(3) Buying goods from other country

(b) Registration

(1) First step in import

(c) Entrepot trade

(2) Goods not for own country

(d) Letter of Credit

(7) Recovery of dues

(e) Large Turnover

(8) Wholesaler

1. (C) Give one word/phrase/term

1. (D) State True or False

1. (E) Find the odd one.

1. (F) Complete the sentences.

1. (G) Select the correct option

1. (H) Answer in one sentence

1. (I) Correct the underlined word and rewrite the following sentences

1. (J) Arrange in proper order

2. Explain the following terms /concepts.

3. Study the following case/situation and express your opinion.

1. Sonupant purchases his grocery material every month from nearest Nandulal grocery shop and he purchase wheat, rice and pulses in bulk for whole year from Gorhe and Son’s Market yard.

2. Anurag is selling goods to Japan. Kavita is buying goods from USA where as Ganesh is buying raw material from South Africa and after processing it sells finished goods to Malaysia.

4. Distinguish between the following

5. Answer in brief.

2. After Sales Services : After sales services are given for a particular period, which is known as guarantee period for costly and durable goods such as refrigerators, TV. etc. Such services create confidence in minds of consumers for further purchases.

3. Regular Supply of Goods : Retailer stocks the goods sufficiently which are required by the customers and customers purchases the goods whenever needed.

4. Credit Facilities : Retailers provides credit facility to customer which helps him to grow up sales and also it is convenient for the customers to purchase goods.

5. Home Delivery : Retailer provides home delivery service to the customers which helps him to maintains permanent relationship with the customers.

(ii) Second Hand Goods Dealers : As the name indicates these shops deal in used or old goods and articles. They buy goods from individual and not from manufacturers or wholesalers. They repair or overhaul the items. They display them in their shops. Generally people from poor communities prefer to buy from these shops.

(2) Negotiation or Trade enquiry : The importer must collect information from overseas suppliers regarding the goods he wants to import of a product. It contains details like-

6. Justify the following statements

7. Answer the following

(B) Definitions:
Philip Kotler “wholese,lling includes all activities involved in selling goods or services to those who buy for resale or for business use.

(C) Features of Wholesaler:

Types of Small Scale Shop Retailers:
(i) General Stores : These shops are found in residential areas and offers shopping convenience to the customers. They deal in wide variety of goods so there is scope for choice. They deal in almost all household articles and goods of daily use. They provide credit facilities and have personal relation with their customers. They have fixed place of business so the customers have faith and confidence in dealing with them.

(ii) Second Hand Goods Shops : As the name indicates these shops deal in used or old goods and articles. They buy goods from individual and not from manufacturers or wholesalers. They repair or overhaul the items. They display them in their shops. Generally people from poor communities prefer to buy from these shops.

(iii) Authorised Dealers : These retailers have an authorized dealership of a particular manufacturer’s goods. They sell of consumers requirement goods like T.V. sets, mobile phones, washing machine, etc.

(iv) Speciality Shops : These retailers deal in particular line of goods. They keep a wide variety of items within the same line of products. They offer goods at reasonable prices. They are popular in cities and towns. They provide wide choice to customers. Normally they carry on business on cash basis.

(B) Services of Wholesaler to Retailers:

(A) Services of Retailers to Customers:
1. Variety of Goods : Retailer keep different brands of goods which helps the customer to choose.

2. After Sales Services : After sales services are given for a particular period, which is known as guarantee period for costly and durable goods such as refrigerators, TV. etc. Such services create confidence in minds of consumers for further purchases.

3. Regular Supply of Goods : Retailer stocks the goods sufficiently which are required by the customers and customers purchases the goods whenever needed.

4. Credit Facilities : Retailers provides credit facility to customer which helps him to grow up sales and also it is convenient for the customers to purchase goods.

5. Home Delivery : Retailer provides home delivery service to the customers which helps him to maintains permanent relationship with the customers.

6. Information : Retailer is a link between manufacturer and consumer. He provides valuable information from the customers to the manufacturer so that he can modify the product as per the likes and dislikes of the customers. Corpplaints regarding defects in goods, improper functioning of the product, constant break down, etc. are passed on to the manufacturers.

7. Local Convenience : Retailers are generally located near residential areas. Hence, customers can buy the goods whenever they require.

8. Improves Standard of Living : Retailers help customers to increase their standard of living by making available all the latest types of goods produced.

9. Sale of Perishable Goods : Perishable goods like milk, meat, fish, vegetables, etc. require quick distribution. Hence, retailer provides this facility as per customers requirement.

(B) Services of Retailers to Wholesaler:

[A] Ist Stage : Preliminary Stage :
(1) Registration : In order to carry out import, the importer has to get himself registered with the authorities given below:

(2) Negotiation or Trade enquiry : The importer must collect information from overseas suppliers regarding the goods he wants to import of a product. It contains details like-

[B] IInd Stage : Pre-import Stage :
(i) Import License / Quota Certificate : The Export Import (EXIM) Policy of our country indicates which goods need license for import and which can be imported freely. For goods that require a license, the importer should get a quota certificate and acquire the license. At the time of importing goods, the IEC number is to be mentioned.

(ii) Foreign Exchange Clearance : The exporter has to be paid in foreign exchange by the importer as he resides in a foreign country. For this the Indian currency has to be exchanged for foreign currency. This is done by Exchange Control Department of the Reserve Bank of India (RBI). The importer has to get the foreign exchange sanctioned. For this he applies in a prescribed form to a bank authorised by RBI. After scrutiny of the documents, the necessary foreign exchange is sanctioned.

(iii) Placing an Order : Once the foreign exchange clearance is obtained from RBI the importer places an import order with the exporter for supply of goods. This order contains information on all aspects relating to the goods to be imported. These include quality, quantity, size, grade, price, packing and shipping, ports of shipment, insurance, delivery schedule and modes of payment. This order is called as indent.

(iv) Letter of Credit : If the exporter agrees to a letter of credit, then the importer obtains it from his bank and forwards it to the exporter. It minimises the risk of non-payment for the exporter. At the same time, the importer should arrange for sufficient funds to be paid on delivery of the goods.

(v) Clearing and Forwarding Agent : The importer then appoints C & F agent to look after the various customs formalities and documentation work with respect to import of goods.

(vi) Shipment Advice: Once the goods are loaded on the vessel, the exporter sends a shipment advice to the importer. This document contains details about the goods, invoice number, bill of lading and name of the vessel, the port of export and date of sailing of the vessel. This will help the importer for custom clearance and unloading of goods.

[C] IIIrd Stage : Import Stage:
(1) Receipt of Document : The importer receives the documents sent by the exporter through his bank. They are as follows Bill of Lading, Certificate of Origin, Certificate of Inspection, Packing List, Commercial Invoice, etc.

(ii) Bill of Entry : The clearing and forwarding agents, then prepare a bill of entry. This bill is presented to the dock superintendent for release of goods. The bill of entry has details like number of packages, quality of good and price of goods.

(iii) Delivery Order : For taking delivery of the goods a delivery order is needed. This is obtained from the shipping company by the C & F agent. Once this is received the freight charges are paid and goods are allowed to be unloaded from the ship.

(iv) Customer Clearance : The importer has to present the Bill of Lading, Bill of Entry and Packing List to the customer authority who will certify it and give customs clearance.

[D] IVth stage : Posts Import Stage:
Various duties have to paid in order to take the goods out of port are:

Export procedure is as follows:
There are four stages which help in simplify the export procedure.
[A] Preliminary Stage : This is the first stage which includes the following steps.
(1) Registration : The exporter gets himself registered with various authorities in order to conduct export trade like-

(2) Appointment of Agent: The exporters are supposed to appoint an agent in the foreign country who will look after the order or book order for the exporter.

[B] Pre-shipment Stage:

[C] Shipment Stage:
(i) Processing of Document: The exporter prepares the shipping bill and gets all the documents processed at the customs house as required for the export of good.

(ii) Examination of Goods : The clearing and forwarding agents obtain1 a document called ‘carting order’ from the Port Trust Authorities, which allows the exporter to take the goods inside the dock area.

(iii) Loading of Goods : On examination of the goods, the ‘Customs Examiner’ issues order called ‘Let Export’ order. This is given to the clearing and forwarding agent by the ‘Customers Preventative Officer’ (CPO). The goods are then loaded on the ship and the captain of the ship issue a receipt called the ‘Mates Receipt’. Then the C & F agent obtain the Bill of Lading.

[D] Post-shipment Stage: