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JAMB Commerce lesson note

International, Wholesale, and Retail Trade

The chain of distribution from producer to consumer, and the basics of import, export, and entrepot trade.

The chain of distribution

Goods typically move from producer to wholesaler (who buys in bulk and breaks it into smaller quantities), to retailer (who sells small quantities directly to the public), to the final consumer. This chain exists because producers usually can't efficiently sell tiny quantities directly to millions of individual consumers, and wholesalers/retailers each add value by bridging that gap in scale and location.

Example 1: Explain one function a wholesaler performs that benefits both producers and retailers.

A wholesaler buys in bulk from producers (saving producers the cost and effort of dealing with many small individual retail orders) and breaks that bulk down into smaller quantities that retailers can afford and manage to stock -- bridging the gap between large-scale production and small-scale retail demand, benefiting both sides of the chain.

International trade in commerce

Importing brings foreign goods into a country (often things not efficiently produced domestically); exporting sends domestically produced goods abroad for sale, earning foreign exchange. Entrepot trade involves importing goods specifically to re-export them to a third country, often taking advantage of a country's strategic trading location, port facilities, or processing capabilities, rather than for domestic consumption.

Key terms

Wholesaler
a business that buys goods in bulk from producers and sells smaller quantities on to retailers
Retailer
a business that sells goods directly to the final consumer, usually in small quantities
Import
bringing goods into a country from abroad
Export
sending goods out of a country to be sold abroad
Entrepot trade
importing goods into a country not to sell there, but to re-export them (often after minor processing) to another country

Practise International, Wholesale, and Retail Trade questions

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