Justify the following statements.
1) Retailer is in direct contact with ultimate consumers.
1. Retailer in a trader operating in the chain of distribution.
2. He deals with the ultimate consumer.
3. Retailer is the last link in the chain of distribution.
4. Goods flow from the producer to consumer in the following way:
Producer → Wholesaler → Retailer → Consumer
5. Thus, retailer comes into direct contact with the ultimate consumer.
2) Commerce is a wider term than Trade.
1. Commerce is a part of the business. Business is divided into two parts; industry and commerce.
2. Commerce is concerned with the distribution of goods.
3. Commerce is divided into two parts. One is a trade and the other is auxiliaries to trade.
4. Trade is concerned with the buying and selling of goods and services.
5. Trade is a part of commerce.
6. Along with trade, commerce also includes auxiliaries or services to trade.
7. These services help in the smooth running of trade.
Thus, it clearly indicates that commerce is a wider term than trade.
3) Risk is inevitable in business activities.
1. Every business is exposed to various risks. A businessman cannot avoid risks in the business.
2. These risks include goods remaining unsold due to changes in fashions, risks of losses due to fire or theft damage to goods during transportation or warehousing, risks of bad debts, etc.
3. A businessman has to be prepared to handle these risks.
4. These risks cannot be totally eliminated. But they can be minimized or transferred to the insurance company A businessman must be ready for the risks as they are inevitable.
5. Thus, the risk is inevitable in business activities.
4) Combination of Import-export trade is entrepot trade.
1. Import, export, and entrepot trade are parts of foreign trade.
2. When the goods are purchased from other countries it is called import trade.
3. When the goods are sold to’ other countries it is called export trade.
4. A combination of import and export trade is called entrepot trade.
5. In the case of entrepot trade goods are first purchased from one country i.e. imported and then sold to or exported to other countries.
6. E.g. Indian trader purchased some computers from japan and sold them to Sri Lanka Will be included in entrepot trade
7. Thus, entrepot trade is a combination of import and export trade.
5) Transport creates place utility
1. Transport is one of the important auxiliaries to trade.
2. Transport brings raw materials and people to the place of production and carries finished products to the market.
3. There are different modes of transport through it carries goods and people from one place to another. They are rail, road, water, and air.
4. If goods are produced in one place, they may not have demanded at that place only.
5. Transport carries them to another place where they are demanded and create place utility.
6. Thus, we can say that transport creates place utility.
6) Industrial activities take place before commerce starts its role.
1. Industry and commerce are the two parts of the business.
2. Both the parts are complementary to each Other.
3. One cannot function without others.
4. Industries look after the production of goods and services and commerce takes care of the distribution of the goods produced.
5. Obviously the production of goods comes first and it is followed by the distribution or selling of goods.
6. Thus, industrial activities take place before commerce starts its role
7) Available resources should be used to its maximum.
1. Resources are always scarce. The demand for resources is more and the availability of resources is less.
2. Similarly, resources belong to the society but the businesses use them for production and provide the finished products to the society.
3. So it is necessary to use the resources carefully.
4. Wastage of resources should be avoided.5. Wherever possible, recycling and reusing the resources should be considered by the businesses
. 6. Thus, Whatever resources available should be used to its maximum.
8) Wholesaler is a link between retailer and manufacturer.
1. Wholesaler and retailers are important intermediaries in trade.
2. They help to bring the goods from the manufacturer to the ultimate consumer.
3. A wholesaler is a trader who deals in large quantities i.e. the wholesaler purchases the goods in bulk from the manufacturer and sells it to retailers in small quantities.
4. Both the Wholesalers and retailers are the part of chain of distribution which is shown below. Producer → Wholesaler → Retailer → Consumer
5. Thus, it is true that Wholesaler is the link between the manufacturer and the retailer.
9) Business is a part of economic activities.
1. Economic activities are those activities which are done with the intention of making money.
2. A person has to earn money for his livelihood.
3. However, all economic activities are not the same. They can be conducted mainly in three different ways. (a) Employment (b) Profession and (c) Business.
4. Business is conducted to earn a profit.
5. A businessman invests his own capital, takes decisions, and carries out business activities.
6. He also takes the risk of carrying business activities.
7. Thus, a businessman is responsible for business activities. The profit earned is enjoyed by a businessman. So business is a part of economic activity.
10) Changing fashions is one of the important cause of business risk
1. Business is exposed to various kinds of risk.
2. The risks can be due to the loss of goods by fire or theft, bad debts, changes in government policies, goods remaining unsold, etc.
3. Goods remaining unsold due to changes in fashion, is also an important type of risk in the business. Due to this risk businessmen can suffer loss.
4. However this risk 1s there 1n case of some goods only e. g. clothes, footwear, jewellery, accessories, sunglasses etc.
5. This risk is not there in case of food grains or vegetables as they are essentials and their demand remains somewhat constant.
6. Thus, changes in fashion is an important risk in the business..