auxilaries to business activities are indispensable..discuss

Dear Student,

Auxiliaries to trade include trade-related activities which facilitate the exchange of goods and services. Among the major auxiliaries to trade, a few are transportation, advertisement, packaging, warehousing, banking and communication. These activities helps in removing the hindrances to trade, namely hindrance of time, place, risk finance and information. 

The following are the various auxiliaries to trade.

(a) Banking and finance: Finance is the most important input to run any business. The absence of a banking and finance system can obstruct the free movement of goods. An efficient banking facility ensures the easy and ready availability of cheap credit to businessmen and traders, and thus acts as an auxiliary to trade.

(b) Advertising: It is through advertisements that businessmen are able to reach a large number of potential buyers. Advertisements through television, the Internet, newspapers, the radio and other various media educate the buyers and make them more aware of the goods available. This helps businessmen to increase their sales. Hence, advertisement plays the role of an auxiliary to trade.

(c) Warehousing- It refers to the holding or preservation of goods until they are transported for final consumption. It helps businesses to store goods and facilitates the availability of goods when required.

(d) Insurance: Every business activity involves various types of risks because of the existence of factors beyond control. Insurance acts as a protection against these risks. On payment of a nominal premium, the loss suffered by a business can be recovered from the insurance company concerned.

(e) Transportation- It enables a producer to purchase raw materials and other inputs from various places and sell the final products in different regions. Transport facilitates the selling and buying of goods.


 

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