Trade/Classification of Trade – JSS1 Business Studies Lesson Note (First Term)

Trade is the buying and selling of goods and services. It has three main branches: home trade, foreign trade and entrepot trade. Home trade takes place within one country and is divided into wholesale and retail trade. Foreign trade takes place between two countries. Entrepot trade is buying from one foreign country to sell to another.

Behavioural objectives

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

• define trade;
• list the three main branches of trade;
• explain home trade and its two divisions, wholesale and retail trade;
• explain foreign trade and entrepot trade, giving an example of each.

What is trade?

Trade is the buying and selling of goods and services. It can also be defined as the activities that cover the exchange, buying and selling of goods and services.

What are the branches of trade?

Trade has three main branches:

1. Home trade
2. Foreign trade
3. Entrepot trade

What is home trade?

Home trade is the exchange, buying and selling of goods and services within a country. For example, Mr. Ade in Lagos buys goods from Mr. Aminu in Kano. This is home trade because the buyer (Mr. Ade) and the seller (Mr. Aminu) are both Nigerians and live in Nigeria. In home trade, only one currency is in use (for example, the naira in Nigeria).

Home trade is divided into two: wholesale trade and retail trade.

What is wholesale trade?

Wholesale trade involves buying in large quantities from the manufacturers and selling to the retailers. Those involved in wholesale trade are called wholesalers.

What is retail trade?

Retail trade involves buying in small quantities from the wholesaler and selling in units to the final consumer. Those involved in retail trade are called retailers.

What is foreign trade?

Foreign trade is the exchange, buying and selling of goods and services between two countries, for example between Nigeria and Ghana. It is also trade between a citizen of one country and a citizen of another country, for example between Ade in Lagos, Nigeria, and Kofi in Accra, Ghana. Buying in foreign trade requires the use of foreign currency.

What is entrepot trade?

Entrepot trade is buying from one foreign country to sell to another foreign country. For example, Mr. Ade in Nigeria buys from Kofi in Ghana to sell to Mr. Johnson in London.

Evaluation

1. Define trade.
2. List and explain the three main branches of trade.
3. What is home trade?
4. List the functions of wholesalers and retailers in the chain of distribution.

Assignment

Reading assignment

Business Studies for J.S.S 1 by O.A Lawal and others, pages 14-15.

Weekend assignment

1. Foreign trade requires the use of: a. bids, b. cowry shells, c. foreign currency, d. naira and kobo.
2. The main branches of trade are the following except: a. home trade, b. entrepot trade, c. foreign trade, d. general trade.
3. Wholesale trade is a branch of: a. home trade, b. foreign trade, c. none of the above.
4. A trade between Obi in Nigeria and Ojo in Nigeria is known as: a. foreign trade, b. home trade, c. friendly trade, d. Nigeria trade.
5. A trade between Nigeria and Togo is known as: a. neighbour trade, b. home trade, c. African trade, d. foreign trade.

Theory

1. List the three main branches of trade.
2. What is retail trade?

Revision questions

1. Define occupation.
2. Give another name for occupation.
3. What is your father’s occupation?
4. Why is your father engaged in an occupation?
5. Among the classes of occupation, where does your father’s occupation fall?