Auxiliaries to trade refers to the factors that are essential for bringing the goods from the place of their production to the place of their consumption. In simple words, these are essential services and functions that assist the business.
In this article, we will be discussing the auxiliaries to trade which are essential for the business to function properly.
The auxiliaries to trade are as follows:
1. Transport and Communication: This is one of the most important auxiliary functions that support the trade. Transportation makes it possible to reduce the time taken for connecting two different geographical locations. It helps in connecting traders with the consumers.
Communication is another important auxiliary component of trade, as communication is instrumental in exchange of information between parties to a trade, which includes producers, traders and consumers.
Various communication services including email, fax, mobile telephone services and the internet are helpful in facilitating trade.
2. Banking and Finance: Banks and financial institutions help drive the wheels of the trade. They are regarded as the financial backbone of the trade. Banks provide the facility of credit for easy availability of funds for the business.
In addition to that, banks also provide overdraft facility, insurance and other services that are essential for smooth functioning of the business.
3. Warehousing: Warehousing refers to the process of stocking of goods so that it can be delivered to customers effectively. It is essential in maintaining the supply of the product, as per the demand in the market.
Warehouses act as storage centers for goods, thereby helping the business with a source of goods storage and also assist in keeping the products safe throughout the entire process of reaching from producer to consumer.
4. Advertising: Advertising is a very essential auxiliary to trade as it helps in the promotion of the goods and services. It helps the businesses in making the customers aware about the product features that are instrumental in fulfilling the customer requirements.
Advertising creates awareness about the product or service which converts into sales. It also helps customers in gaining knowledge about the product.
5. Insurance: Businesses involve activities that are having risk and for such risks the businesses need protection. The type of risks that can occur in a business can be fire, accident, theft or damage to equipment or products.
Insurance provides cover against all such risks and is therefore helpful for a business to recover once it has been affected by any of the above mentioned risks.
6. Packaging: Packaging is another of the important auxiliaries to trade as it helps in reducing the spoilage of products, thereby ensuring businesses can earn revenue instead of making losses due to wastage of products.
This concludes the topic of Auxiliaries to Trade, which is an important topic of Business Studies for Commerce students. For more such interesting articles, stay tuned to BYJU’S.