Types of trade - SS1 Commerce Lesson Note

Home Trade

Home trade, also known as domestic trade, refers to the buying and selling of goods and services within the boundaries of a single country. It involves transactions between individuals, businesses, or organizations operating within the same country. For example, when you buy groceries from a local supermarket or purchase a product from a nearby store, you are engaging in home trade.

Foreign Trade

Foreign trade, also called international trade, involves the exchange of goods and services between different countries. It encompasses the import and export of goods, where one country sells products to another country, and vice versa. Foreign trade allows countries to access a wider range of goods and services that may not be available or produced efficiently within their own borders. For instance, when a country exports automobiles to another country or imports electronics from overseas, it is participating in foreign trade.

Entrepot Trade

Entrepot trade refers to a specific type of international trade where a country acts as an intermediary or middleman for goods passing through its territory. In this type of trade, the country serves as a transshipment point, where goods are temporarily stored, processed, or re-exported to other countries. The primary purpose of entrepot trade is to facilitate the exchange of goods between different regions, taking advantage of favorable geographical locations or trade policies. Some examples include free trade zones, duty-free ports, or trading hubs where goods are stored, sorted, or repackaged before being shipped to their final destinations.