Activities that help in the process of trading are known as Auxiliaries to trade or Services to trade. For example transport, banking, insurance, storage, advertising etc. These /activities services play a very supportive role and are considered to be an integral part of commerce. These services help in removing the hindrances of place, time, money, risk, and information which may arise in the course of production and distribution of goods.
Auxiliaries To Trade
The various auxiliaries to trade are explained below:
1 Transport and Communication:
Goods are generally produced at a particular location but are needed at different places as well. This hindrance of the place is removed by various means of transportation like railways, trucks, road etc. These services not only facilitate movement of raw materials from the place of its availability to the factories but also the finished goods from the factories to the place of their consumption.
Communication is also an important service. It facilitates the exchange of information among producer, traders, and consumers. Common means of communication are postal service, internet, telephone facility etc.
2 Banking and Finance:
Every business requires funds for the long-term and short-term purposes. They require funds for long-term purposes like acquiring land, building, machinery etc and for short-term purposes such as meeting daily expenses. Banks meet their necessary funds’ requirements. Thus, banking helps in removing the hindrance of finance.
A risk is always associated with the business. The various types of assets of the business, such as building, plant, and machinery, goods in transit o
Generally, goods are not consumed immediately after production. There is always a time gap between the production and consumption of goods. Thus, it becomes essential to store them in such a way that enables the same to be available as and when they are required. Hindrance of storage is removed by warehousing. Warehousing ensure continues the supply of goods which ultimately helps in maintaining the reasonable level of prices.
Advertising is always the most important tool for sales promotion. It is not possible for the producer/ trader to personally contact each and every consumer and provide him/ her information about the products. Advertising provides the necessary information to the consumers about the products such as price, quality, uses, availability etc. Thus, advertising helps in removing the hindrance of information.
I hope that the article Auxiliaries to Trade proves to be very helpful for you.
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