Classification of Trade

Business studies study module

On the basis of geographical location of the portion involved, These are:

  1. Home trade-Also called internal, local or domestic trade.

It refers to the buying and selling of goods and services within the boundaries of a given country.

It is further divided into retail trade and wholesale trade.

2.International trade (foreign trade)

-This is trade that is carried out beyond the boundaries of a country

-This is trade carried out between individuals or government of different countries e.g. trade between a citizen of Kenya and a citizen of Tanzania, or trade between the government of Kenya and the government of Southern Sudan

-International trade carried out between two countries is referred to as bilateral trade and international trade carried out among many countries (more than two countries) is referred to as multilateral trade.

International trade is classified into the following;

  1. Export Trade-Which is the sale of goods and services by a country to another country or individuals in one country to another country or individuals in one country to individuals in another country.
  2. Import Trade-Which is the buying of goods and services by one country from another country or by individuals in one country from individuals in another country.

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