Internal Trade Class 11 Notes: CBSE Business Studies Chapter 10

Internal trade refers to the buying and selling of goods and services within a country’s borders.

Payments are made in the local currency, and only minimal formalities are required. Internal trade is categorised into two main types:

1. Wholesale Trade:

1. Definition: Wholesale trade involves selling goods in large quantities to retailers, industrial users, or other businesses. Wholesalers do not sell directly to consumers but play a crucial role in the distribution chain.

2. Services to Manufacturers:

• Facilitates Large-Scale Production: Wholesalers collect bulk orders from various retailers and pass them on to manufacturers, enabling large-scale production.

• Bearing Risks: Wholesalers purchase and store goods, assuming risks such as price fluctuations, spoilage, and theft.

• Financial Assistance: By making immediate payments to manufacturers, wholesalers ensure that manufacturers don’t have to tie up their capital.

• Expert Advice: Being in direct contact with retailers, wholesalers can advise manufacturers on market trends and consumer preferences.

• Aids in Marketing: Wholesalers handle many marketing activities, freeing manufacturers to focus on production.

• Ensures Production Continuity: By purchasing goods in bulk and storing them, wholesalers allow manufacturers to maintain continuous production.

• Storage: Wholesalers store large quantities of goods in warehouses, ensuring availability when retailers need them.

3. Services to Retailers:

• Availability of Goods: Wholesalers ensure that retailers have a steady supply of goods to meet customer demand.

• Marketing Support: Wholesalers often help retailers with promotional activities, boosting the sales of new products.

• Credit Facilities: Wholesalers may offer credit to retailers, enabling them to purchase goods without immediate payment.

• Specialised Knowledge: Wholesalers provide insights into product lines, helping retailers make informed decisions.

• Risk Sharing: By purchasing smaller quantities from wholesalers, retailers reduce risks associated with unsold inventory.

2. Retail Trade:

1. Retail trade involves selling goods and services directly to the final consumers. Retailers purchase in bulk from wholesalers and sell in smaller quantities.

2. Services to Manufacturers & Wholesalers:

• Helps in Distribution: Retailers make goods available to consumers spread across large geographic areas, providing place utility.

• Personal Selling: Retailers engage in personal selling, helping to promote and sell products directly to consumers.

• Enables Large-Scale Operations: Retailers allow manufacturers and wholesalers to focus on large-scale production and distribution.

• Collects Market Information: Retailers gather valuable market data on consumer preferences, which helps manufacturers and wholesalers make informed decisions.

• Aids in Promotion: Retailers participate in promotional activities initiated by manufacturers, helping to increase product sales.

3. Services to Consumers:

• Regular Availability of Products: Retailers ensure a continuous supply of goods, allowing consumers to buy what they need when they need it.

• New Product Information: Retailers inform consumers about new products, influencing buying decisions.

• Convenience in Buying: Retail stores are conveniently located, making it easy for consumers to purchase goods as needed.

• Wide Selection: Retailers offer a variety of products, allowing consumers to choose from a wide selection.

• After-Sales Services: Retailers provide services like home delivery and product repairs, enhancing customer satisfaction.

• Credit Facilities: Retailers may offer credit to regular customers, encouraging repeat business.

Types of Retailers:

1. Itinerant Retailers:

These retailers do not have a fixed place of business. They move from place to place to sell their goods. Examples include:

1. Peddlers and Hawkers: Small traders who sell low-cost, daily-use items like fruits, vegetables, and toiletries by moving around residential areas.

2. Market Traders: Retailers who set up stalls in markets on specific days, serving customers in lower-income areas.

3. Street Vendors: Retailers who sell items like newspapers, clothing, and snacks in areas with high foot traffic, such as near bus stops or railway stations.

4. Cheap Jacks: Retailers who operate from temporary shops and frequently move locations, offering services like repairs along with goods.

2. Fixed Shop Retailers:

These retailers have a permanent location from which they conduct their business. They can be categorised into:

1. Small Shopkeepers:

• General Stores: Offer a wide range of products needed for daily life, often providing credit to regular customers.

• Specialty Shops: Focus on a single type of product, like electronics or furniture, offering a wide variety within that category.

• Street Stallholders: Operate small stalls selling low-cost items like snacks, drinks, or toys.

• Second-Hand Goods Shops: Sell used items such as books, clothing, or furniture at lower prices.

2. Large Retailers:

• Departmental Stores: Large stores are divided into different sections, each specialising in a type of product, providing a one-stop shopping experience.

• Chain Stores: Multiple outlets of the same store located in different areas, offering standardised products and services.

• Consumer Cooperative Stores: Owned and managed by consumers, these stores aim to provide goods at reasonable prices by eliminating middlemen.

• Supermarkets: Large self-service stores offering a wide variety of goods at lower prices, usually located in central shopping areas.

• Vending Machines: Automated machines selling items like snacks, beverages, and tickets, offering convenience for low-cost, standardised goods.

• Mail Order Houses: Retailers that sell goods via catalogues and deliver them by mail, ideal for standardised products that can be easily described.

Goods and Services Tax (GST):

• Introduction: GST, implemented on July 1, 2017, is a single tax that replaces multiple indirect taxes, simplifying the tax structure in India.

• Benefits: GST reduces the overall tax burden, eliminates hidden taxes, and creates a unified national market, boosting economic activity and employment opportunities.

• Structure: GST is a destination-based tax charged at every stage of value addition, with four tax slabs (5%, 12%, 18%, and 28%).

Important Topics of Business Studies Class 11 Chapter 10 Internal Trade

Learnings of Class 11 Chapter 10 of Business Studies

• Gain insights into the processes and significance of trade conducted within national borders.

• Learn about the services provided by wholesalers and retailers and their impact on the distribution chain.

• Explore different types of retail operations, including itinerant and fixed-shop retailers.

• Understand the role of GST in simplifying and unifying the tax system across India.

 Importance of Revision Notes for Class 11 (Business Studies) Chapter 10

• Summarises Key Points: Condenses important concepts for quick review.

• Saves Time: Provides a fast way to revise before exams.

• Highlights Essentials: Focuses on crucial topics and definitions like Excretion in plants and animals.

• Improves Memory: Helps in better retention of information.

• Enhances Exam Prep: Targets weak areas for more effective study.

• Clarifies Concepts: Simplifies complex ideas for easier understanding.

• Includes Visuals: Uses diagrams and charts for better grasp as explained for blood circulation in the Human body.

• Boosts Confidence: Prepares students thoroughly for exams.

Tips For Learning the Class 11 Chapter 10 Internal Trade

1. Focus on core processes with illustrations and examples.

2. Draw and label diagrams for clarity.

3. Create summaries of each process.

4. Connect concepts to everyday examples.

5. Solve past exam questions to test understanding.

6. Explain concepts to others to reinforce learning.

7. Revisit material frequently to retain information.

8. Utilise platforms like Vedantu for additional support.

Conclusion

Chapter 10 of Business Studies provides an overview of internal trade, highlighting its crucial role in the economy. It explains how wholesalers and retailers contribute to the distribution of goods and services, and how GST has transformed the trading landscape in India. This chapter serves as a foundational understanding of how trade operates within a country's borders and the mechanisms that support it.

Related Study Materials for Class 11  Chapter 10 Internal Trade

Revision Notes Links for Class 11  Business Studies

You can also access chapter-wise Revision Notes for Class 11 Business Studies from the links below and kick-start your preparation for Class 11 Board exams.

Other Important Study Material Links for Class 11 Business Studies

You can also access chapter-wise Revision Notes for Class 11 Business Studies from the links below and kick-start your preparation for Class 11  exams.