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Q.1 ) Fill in the blanks with correct answers. ( 5 Marks with any 5 )
1) Price charged by retailers is generally…….
a) higher b) lower c) fixed.
2) ……..is the link between producer and retailer.
a) Consumer b) Wholesaler c) Manufacturer
3) ….… carry goods on their head in baskets or containers.
a) Hawkers b) Peddlers c) Cheap Jacks
4)....... retailers deal in particular goods.
a) General Stores b) Speciality shop retailers c) Second hand goods shops.
5) ……. is known as self- service store.
a) Department store b) Super market c)Multiple store
6) ...........open their shops on market days i.e. on fixed days.
a) Street traders b) Market Traders c)Peddlers
Q.2 ) True or False . ( 2 marks with any 2 )
1) Wholesaler keeps large stock of goods.
2) Wholesaler deals in small quantity.
3) A retailer has no direct contact with consumers.
Q.3) Find odd man out. ( 1 marks with any 1 )
1) Speciality Shops, Second hand goods shops, Malls, Authorised Dealers.
2) General Stores, Hawkers, Cheap Jacks, Peddlers.
Q.4 ) Answer in one sentence. ( 4 marks with any 4 )
1) What do you mean by internal trade?
2) Who is known as hawkers?
3) What is the meaning of peddlers?
4) What is one price shop?
5) What is mall?
6) What is meant by supermarket shop?
Read more : OCM-Chapter-1-Test-Class-11
Q.5) Answer in brief ( 8 marks with any 2 )
1) Explain preliminary stage of Import procedure.
2) State any four services of wholesalers to manufacturers.
3) State any two types of small scale fixed shop retailer.
Q.6 ) Answer the following. (5 Marks with Attempt any 1 )
1) Define import trade.Explain its procedure in detail.
2) What is export trade? Explain its procedure in detail.
3) Explain different services of retailers.
Answers :
Q.1) Fill in the blanks with correct answers. ( 5 Marks with any 5 )
1) Price charged by retailers is generally higher.
2) Wholesaler is the link between producer and retailer.
3) Peddlers carry goods on their head in baskets or containers.
4) Speciality shop retailers retailers deal in particular goods.
5) Super market is known as self-service store.
6) Market Traders open their shops on market days i.e. on fixed days.
Q.2 ) True or False . ( 2 marks with any 2 )
Answer :
1) True.
2) False
3) False
Q.3) Find odd man out. ( 1 marks with any 1 )
Answers:
1) Malls
2) General Stores
Q.4 ) Answer in one sentence. ( 4 marks with any 4 )
Answers:
1) Trade carried on within the geographical boundaries of a country is called internal trade or domestic trade .
2) A trader who carries the goods on the back of animals or wheel cart for the purpose of selling is called an hawkers.
3) Mobile retailer who carry goods on their head or back and move from one place to
another for selling are called paddlers.
4) One price shops are shops where all articles are sold at one standard and fixed price.
5) A mall is a large enclosed shopping complex comprising of various stores business cinema theaters and restaurants.
6) It is a large scale retail organization which sells a wide variety of goods to customers on the basis of self service.
Q.5) Answer in brief ( 8 marks with any 2 )
Answers:
1)
Import trade refers to buying of goods and services from another country or countries i.e. a foreign country. The procedure of import trade varies from one country to another country depending upon the policy implemented in that country. Import of goods and services is controlled by the government in most of the countries.
India follows the following import procedure, which is divided into four stages.
Preliminary Stage:
(1) Registration: In order to carry out import, the importer has to get himself
registered with the authorities given below:
(I) Director General Foreign Trade (DGFT) in order to get an Import-Export Certificate
Number.
(II) The Income Tax department to obtain Permanent Account Number.
(III) To carry out GST formalities.
(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:
(a) Price (b) Delivery schedule, (c) Credit period and (d) Terms and conditions of sale,
payment and delivery.
2)
Services of Wholesalers to Manufacturers.
(I) Provide Finance: Wholesaler provides advance to the manufacturers so they can do bulk production. Manufacturer can maintain continuous flow of production.
(II) Collecting Order and Distribution of Goods:
Wholesaler collects small orders of
goods from the retailers then he collects the goods from manufacturer and distributes it
to retailers.
(III) Goods Sale on Large Scale:
Wholesaler sells goods to the retailers on large scale on behalf of manufacturers.
(IV) Economy in Production:
Large scale of production is made possible because production of goods is done continuously by the manufacturer.
(V) Market Information:
Wholesaler provides latest information of market condition to manufacturer. On the basis of this information manufacturer changes his production policies and regulates production activities.
(VI) Storage:
The wholesaler provides storage facilities for the manufacturers’ product of goods. This helps them to fill up the time gap between production and consumption of goods.
3)
Types of Small Scale Shop Retailers:
(I) General Store Retailer:
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.
2) 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.
Q.6 ) Answer the following. (5 Marks with Attempt any 1 )
Answers:
1)
Import trade refers to buying of goods and services from another country or countries i.e. a foreign country. The procedure of import trade varies from one country to another country depending upon the policy implemented in that country. Import of goods and services is controlled by the government in most of the countries India follows the following import procedure, which is divided into four stages.
[A] 1st Stage: Preliminary Stage:
1) Registration:
In order to carry out import, the importer has to get himself registered with the authorities given below:
(I) Director General Foreign Trade (DGFT) in order to get an Import-Export Certificate
Number
(II) The Income Tax department to obtain Permanent Account Number.
(III) To carry out GST formalities.
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 (a) Price (b) Delivery schedule, (c) Credit period and (d) Terms andconditions of sale, payment and delivery.
[B] 2nd 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] Stage: Import Stage:
(I) 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] 4th stage: Posts Import Stage:
Various duties have to paid in order to take the goods out of port are:
(I) Port Trust Dues: The clearing and forwarding agent has to make the payment of port trust dues.
(II) Customer Duty: Also paid by the clearing and forwarding agent to the custom
authorities.
(III) Insurance Premium: Under the FOB (Free of Board) impact, the importer has to
make the payment of Insurance Premium.
(IV) Payment of Freight: The shipping contract will lay down the amount of freight to
be paid and it has to be paid by the importer for getting clearance of goods.
(V) Exporters Payment: The exporter draws a bill of exchange on the importer
according to the terms and conditions of the contract.
(VI) Follow Up: It is the duty of the importer to take a follow up of the goods. If there
are any discrepancies in the Order or goods it has to be intimated to the exporter. Thus,
the procedure of importing goods comes to an end.
2)
Trade between two countries is called International Trade. It can be import or export
trade. Export trade refers to selling of goods and services to other country or foreign
countries 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
(I) Director General of Foreign Trade 1n order to obtain Import Export Certificate Number
(II) Income Tax Authority to obtain Permanent Account Number.
(III) Export Promotion Council (EPC) and GST authority.
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:
(I) Receipt of Order: When the exporter receives an order he has to check the details
of the order. He also check the restriction of import in the importer’s country.
(II) Letter of Credit: The exporter has to obtain a letter of credit from the importer,
which is used to clear the foreign exchanges and other restrictions.
(III) Pre-shipment Finance: The exporter has to meet his working capital needs and
for that he has to obtain the pre-shipment finance from his bankers.
(IV) Production of goods: If the exporter is a manufacturer, then he has to produce
the goods according to the order placed by the importer, otherwise he has get the
necessary goods arranged from his suppliers.
(V) Packaging: Packaging plays a very important role in export business. Goods have to
be packed as per the requirement of the importer and it should protect the goods in
transit, preserve the quality of goods and carry out promotion of goods.
(VI) ECGC Cover (Export Credit and Guarantee Corporation): In order to protect
the goods and cover the credit risks, the exporter must obtain an cover of ECGC. The
ECGC covers the risk upto 90%, if the importer fails to make the payment.
(VII) GST formalities (Goods and Service Tax): All formalities regarding GST must
be complied With by the exporter.
(VIII) Marine Insurance: For exporting the goods, it is mandatory for the exporter to
take a marine insurance policy for the goods exported. This insurance is under CIF (Cost,
Insurance and freight) contract.
(IX) Clearing and Forwarding Agents (C & F agents): The exporter has to appoint a
clearing and forwarding agent to carry out the necessary formalities of customs. They are also called custom house agents.
[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 obtain 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:
(I) Shipment Advice: On the dispatch of the goods, the exporter sends shipment
advice to the importer Along with it, he also sends the packaging list, commercial invoice and non-negotiable copy of loading.
(II) Presentation of Documents: The necessary documents are presented to the bank for negotiation and realisation of export proceeds.
(III) Realisation of Export incentive: Various incentive like duty drawbacks refunds of
GST if paid etc. is given to the exporter by the concerned authorities.
(IV) Follow up: Exporter has to follow up and find out the buyers reaction on the goods
he receives This concludes the export procedure.
3)
Retailers provides services to:
(A) Customers and (B) Wholesaler
(A) Services of Retailers to Customers:
(I) Variety of Goods: Retailer keep different brands of goods which helps the customer
to choose.
(II) 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.
(III) Regular Supply of Goods: Retailer stocks the goods sufficiently which are
required by the customers and customers purchases the goods whenever needed.
(IV) 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.
(V) Home Delivery: Retailer provides home delivery service to the customers which
helps him to maintain permanent relationship with the customers.
(VI) 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. Complaints regarding defects in
goods, improper functioning of the product, constant break down, etc. are passed on to
the manufacturers.
(VII) Local Convenience: Retailers are generally located near residential areas. Hence,customers can buy the goods whenever they require.
(VIII) Improves Standard of Living: Retailers help customers to increase their
standard of living by making available all the latest types of goods produced.
(IX) 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:
(I) Create demand: Retailers attracts consumers attention towards new products and arrivals in the market through personal salesmanship.
(II) Helps to Distribute: Retailer helps distributing perishable goods which are having short life. He also performs assembling, grading and packing function.
(III) Marketing: Retailers sometimes carry marketing function for the wholesalers i.e.
handling transportation, solving shortage problems, advertise goods, etc.
(IV) Financing: Wholesaler collects order from customers and take advances from
them. Then places order to finally it reaches the manufacturer. Retailer collects sales
proceeds from customer and passes it to the Wholesaler and finally it reaches the
Manufacturer.
(V) Attracts Consumers: Retailer makes an advertising of goods by displaying in the
showroom and thus promote sales. This activity directly helps the wholesaler to sell the product.
(VI) Provides Information: Retailer provides information to the wholesaler regarding
market and demand of goods by the customers, likes and dislikes of customers, etc.
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