What are Various Aids To Trade ?

Aids to Trade are commercial services which assist the functioning of the trade. There are six basic Aids to Trade. The various aids to trade in commerce are explained in following points :-

1. Transport

In the modern times there is a vast distance between centers of production and centers of consumption. This difficulty is removed by an important aid to trade known as transport. Transport creates place utility.

There are several kinds of transport such as air, water and land transport. The geographical distance between producers and consumers is removed with the help of transport.

2. Communication

Communication means transmitting or exchange of information from one person to another. It can be oral or in writing. It is necessary to communicate information from one to another to finalise and settle the terms of sales such as prices of goods, discount allowed, facility of credit, etc. Modern means of communication like telephone, telex, telegraph, email, teleconference, etc., plays an important role in establishing contact between businessman, producers and consumers.

3. Warehousing

There is a time gap between production and consumption. In other words, goods, which are produced at one time, are not consumed at the same time. Hence, it becomes necessary to make arrangements for storage or warehousing. Agricultural commodities like wheat and rice are seasonal in nature but are consumed throughout the year, on the other hand goods such as umbrellas and woolen clothes are produced throughout the year but are demanded only during particular seasons. Therefore goods need to be stored in warehouses till they are demanded. So it creates time utility by supplying the goods at right time to consumer.

4. Insurance

Insurance reduces the problem of risks. Business is subject to risks and uncertainties. These are inevitable in the field of business. Risks may be due to fire, theft, accident or any other natural calamity. Insurance companies who act as risk bearer cover risks. Insurance tries to reduce risks by spreading them out over a greater number of people. The rate of premium depends upon the type of risks and the period for which the risk is covered.

5. Banking

Banking solves the problem of finance. Businessmen receives money and also pays money in large amounts. It is risky to carry large amount of cash from one place to another. Here comes Bankingas aa a solution. Banking and financial institutions solves the problem of payment and facilitate exchange between buyer and seller. The businessmen may also require short-term and long-term funds. Banks provide such finance to businessmen. Banks also advances loans in the form of overdraft, cash credit and discounting of bills of exchange.

6. Advertising

Advertising fills the knowledge gap and it solves the difficulty of information. Exchange of goods and services possible only if producers can bring the products to the consumers. Advertising and publicity are important medias of mass communication. Advertising helps the consumers to know about the various brands manufactured by several manufacturers. The medias used to advertise products are Radio, Newspapers, Magazines, TV, Internet, etc.