COMMERCE 101.

                        FOREIGN TRADE & AIDS TO TRADE.      

Hey Everyone, Its Been a while-Right?. I know and am sorry it took this long to post again. It’s just that when you start something NEW, you face a lot of oppositions, but not to worry am here now and we will pick up from where we stopped.

So we stopped at Home Trade, Today we continue from FOREIGN TRADE.

FOREIGN TRADE:

Foreign Trade is simply when a business Transaction happens between people living in two or more Countries. For Example, Nigeria as a Country sells Oil to countries like the USA (United States of America), in exchange for money. When we buy things like Clothes, Shoes etc on the internet from London or Paris in exchange for money using our Master Cards, we are engaging in FOREIGN, INTERNATIONAL or EXTERNAL TRADE. Moving on there are types of Foreign Trade, and they include:

1.    Bilateral Trade- which is a type of Trade between only two Countries, like our example above about Nigeria & USA. It is between only (2) Countries.

2.    Multilateral Trade- is a trade between more than two Countries, like a Trade between Nigeria, Ghana & South Africa.

DIVISIONS OF FOREIGN TRADE:

1.    Import: is the act of buying goods from a country. For Example Buying Cars from the US is IMPORT.

2.    Export: is the act of selling goods to another country. For Example Selling Oil to the US as mentioned earlier.

3.    Enter-Port: is the act of buying goods from one country and re-selling to another country.

                              AIDS TO TRADE.

Aids to Trade are the auxiliaries to Trade, they are the Agents that Facilitate and help Trade become a Reality. They make Trade easier to engage in. These Agents include:

1.    Banking: Banks provide funds to business people in form of Loans and Overdrafts. So for those who want to engage in Business, but don’t have the Capital (Money used to start a business) to start. Banks are there to help.

2.    Transportation: This is concerned with helping Businesses that involve Movement, like Agriculture that involves moving Farm Products from the Barn (Warehouse)/Farm to the Market.

3.    Advertisement: This is about awareness, making people know about a product. It involves Radio, Television, Websites, Blogs, Billboards, Handbills, Trade fairs, Catalogues etc.

4.    Warehousing: involves the process of storing products till Demand is made for it. This encourages manufacturing Goods & Services ahead of Demand and Supply.

5.    Communication: is sending information to Partners, Clients, Customers, Associates etc. This is done with the Internet, Telex, Telephone, IPads, Android Systems etc.

6.    Insurance: This is still not very welcomed in Nigeria but it is a way of securing a business against loss.

Functions of Commerce:

1.    It promotes Trade.

2.    It increases People’s Standard of Living especially in under-developed Countries.

3.    It provides Protection against Risks involved in business through Insurance.

4.    It provides Employment Opportunities for People.

5.    It helps to develop the Technology of a Country.

6.    It promotes the Transfer of Information through Communication.

7.    It Ensures Speedy Supply of Goods and Services through Warehousing.

8.    It provides Funds for carrying out Industrial Activities through Banking.

Factors Affecting the Growth of Commerce In West Africa:

1.    Lack of Sufficient Capital- Despite the fact that the Banks are suppose to provide funds in form of Loan, some Banks are not performing their duty.

2.    Lack of Well-developed Aids to Trade-   Our Roads are not all Tarred, Advertising still costs a little too much for small businesses, Not all businesses can afford to setup Warehouses of their own, Insurance is till too big a risk for owners of small businesses in West Africa to undertake and the Telecommunication Industry is not without its Faults.

3.    Constant Change of Government- Laws are changed with every new Government that comes into Power and this affects commercial activities.

4.    Low Level of Education- Business requires some level of education to run effectively which most businessmen & women lack thereby causing unnecessary loss and mistakes.

This concludes our session today, hope it was fun. Any Questions you have do not hesitate to call my attention to it. Until we meet again, remain ever blessed.