Internal Trade | Important Questions | Business Studies | 1st Year / Class 11 – Commerce | AHSEC (Assam)

Internal Trade | Important Questions | Business Studies | 1st Year / Class 11 – Commerce | AHSEC (Assam)

Q. Discuss the functions of a retailer. (5marks) (2015/2016/2019)

-> The retailer is a business enterprise that is engaged in the sale of goods and services directly to the ultimate consumers. The Retailer normally buys goods in large quantities from the wholesalers and sells them in small quantities to the ultimate consumers. 

 The functions of s retailer:-

1) Buying- A retailer buys a wide variety of goods from different wholesalers after estimating customer demand. He selects the best merchandise from each wholesaler and brings all the goods under one roof. In this way, he performs the twin functions of buying and assembling goods.

2) Storage- A retailer maintains a ready stock and displays them in his shop.

3) Selling- The retailer sells goods in small quantities according to the demand and choice of consumers. He employs efficient methods of selling to increase his sales turnover.

4) Grading and Packing- The retailer grades the goods which are not graded by manufacturers and wholesalers. He packs goods in small lots for the convenience of consumers.

5) Risk-bearing- A retailer always keeps stock of goods in anticipation of demand. He bears the risk of loss due to fire, theft, spoilage, price fluctuations, etc.

Q. What is a department store? Discuss its advantages and disadvantages. (2+3+3=8) (2016/2018)

-> Departmental store is a large scale retail organisation having a number of departments under one roof. Each department specialises in one particular kind of trade. All these departments are centrally organised and are under one united management and control. 

                 According to Thomas “A large retail establishment having in the same building a number of departments each of which confine its activities to one particular branch trade and forms a complete unit in itself.”


1) Departmental stores attract a large number of customers.

2) Departmental stores provide great convenience to customers in buying almost all goods of their requirements at one place.

3) Departmental stores are at a very large-scale, the benefits of large-scale operations, particularly, in respect of purchase of goods are available to them.

4) Departmental stores are in position to spend a considerable amount of money on advertising and other promotional activities, which help in boosting their sales.


1) Because of the large-scale operations, it is very difficult to provide adequate personal attention to the customers in these stores.

2) The cost of doing business is very high in the case of departmental stores as they have to pay high rents, salaries to staff and spend much on various facilities provided to the customers.

3) Due to high costs of operation and establishment, the prices of commodities in departmental stores are comparatively high.

Q. What is consumers’ cooperative store? Explain its merits and demerits. (2+3+3=8) (2015/2017)

-> A consumer co-operative store is a retail unit owned and controlled by consumers. Any consumer can join the consumer co-operative store by buying its shares. Each member has only one vote irrespective of his shareholding. Members get dividends in proportion to their shares held in the co-operative store. Co-operative stores are run by the consumers themselves for their mutual benefits. Due to the consumers’ co-operative stores, the consumers are able to get the non-adulterated goods easily. 


1. Consumers get goods of good quality.

2. Goods are sold without adulteration.

3. Goods are sold in correct measurement. Irregularities found in measurement of goods are avoided.

4. Middlemen are eliminated.

5. Prices are comparatively cheaper.

6. Regular supply of goods is assured.

7. No credit is allowed. So, there is no fear of bad debts.

8. Consumer co-operatives are located conveniently in residential areas, thus they are quite accessible.


1. It caters to the needs of small and medium income groups of the society.

2. It suffers from low finances.

3. Due to low capital found it cannot engage professional managers for its management.

4. There is too much dependence on the honesty and loyalty of the workers.

Q. Define wholesaler? Discuss the difficulties which the manufactures will face if the wholesalers are eliminated. (2+6=8) (2015)

-> A distributor that sells products to a retailer. A wholesaler will sell his product in bulk quantities to retailers, allowing the retailer to take advantage of a lower price than if he were to buy single items. The wholesaler will typically buy goods directly from the manufacturer, but could also buy from a reseller. In either case, the wholesaler gets larger discounts for buying large quantities of goods. The wholesaler is rarely involved in the actual manufacture of a product, focusing instead on distribution.

Difficulties faced by manufacturers if wholesalers are eliminated:-

Wholesaler provides various services to manufacturers as well as to retailers. If they are eliminated then manufacturers as well as to will not get their valuable services. These are the following services offered by the wholesalers to manufacturers:-

1. Large Scale Production- Wholesalers purchase large quantities and facilitate large scale production.

2. Concentration on Production- Wholesalers allow manufacturers to concentrate on production only & wholesaler handle the distribution activities.

3. Market information- Wholesalers provide market information to manufacturers regarding new product ideas, product modification, and competitor’s activities.

4. Financial Assistance- Wholesalers provide financial assistance to manufacturers who purchase goods on cash. Sometimes they give advances to manufacturers.

5. Risk Bearing- Wholesalers undertake the risk of dealing in the goods produced by the manufacturer. He bears the risk of fluctuation in demand and price.

6. Storage- Wholesalers provide storage facilitates for finished goods.

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