Aid to Trade – JSS1 Business Studies Lesson Note (First Term)

Aids to trade are the things or agents that make trade grow and make it easy. They are also called factors of trade or auxiliary to trade. The seven aids to trade are insurance, banking, transportation, warehousing, advertising, communication and tourism.

Behavioural objectives

By the end of the lesson, students should be able to:

• explain what aids to trade are;
• list the seven aids to trade;
• state the function of each aid to trade;
• explain how each aid helps trade.

What are aids to trade?

By the expression “aids to trade” we mean those things or agents that make trade grow. Aids to trade make trade easy. For this reason, they are called aids to trade, factors of trade or auxiliary to trade.

Which are the aids to trade?

1. Insurance
2. Banking
3. Transportation
4. Warehousing
5. Advertising
6. Communication
7. Tourism

What are the functions of aids to trade?

Insurance

Insurance covers risks. It is an aid to trade because it encourages businessmen to take risky business ventures.

Banking

The two main functions of a bank are to save money and lend money. The money accepted and saved for customers is lent to businesses as capital. In this way, the bank is an aid to trade.

Transportation

Transport helps trade by moving goods from one place to another. For example, it moves goods from where they are surplus to where they are scarce.

Warehousing

Warehousing is concerned with storing goods in safe condition until they are demanded. Therefore, warehousing prevents the scarcity of goods.

Advertising

Advertising is the activity of informing members of society that a particular good or service exists, and telling them its quality and function. It is an aid to trade because it creates awareness and demand for goods and services.

Communication

Communication is the interaction between buyers and sellers, for example through discussion, letters or the telephone, so that goods can be bought or sold. An example is a letter of enquiry about the goods available in the warehouse.

Tourism

Tourism covers all the activities that make someone on tour comfortable. Examples are good hotel accommodation and tourist centres. Tourism assists trade because tourists from foreign countries bring foreign currency into the economy.

Evaluation

1. What do you understand by “aids to trade”?
2. List the aids to trade you know.
3. What is the importance of transportation in business?
4. How can insurance serve as an aid to trade?

Assignment

Reading assignment

Business Studies for J.S.S.1 by O.A. Lawal and others, pages 15 to 16.

Weekend assignment

1. The following is not an aid to trade: (a) advertising (b) insurance (c) banking (d) manufacturing.
2. Aids to trade can also be called (a) auxiliary to trade (b) friends of trade (c) foreign trade (d) home trade.
3. Banking is an aid to trade because (a) it keeps a lot of money (b) bank managers are in commercial occupations (c) many banks work on Saturday (d) it can save and lend money to various traders.
4. Warehouses are useful to trade because (a) they are a means of keeping goods until they are demanded (b) they cause scarcity of goods (c) they can lead to inflation (d) they move goods from one place to another.
5. Insurance is useful to trade because (a) it links buyers and sellers together (b) it moves goods from the point of production to where they are demanded (c) it prevents scarcity (d) it encourages businessmen to undertake risky business.

Theory

1. List the seven aids to trade.
2. Explain two of the aids listed in question one above.

Revision questions

1. What is trade?
2. Who is a trader?
3. Draw the division of trade.
4. What is home trade?
5. Mention traders who are involved in home trade.