rade

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This article is about the economic mechanism. For other uses, see Trade (disambiguation).

A trader in Germany, 16th century

The San Juan de Dios Market in Guadalajara, Jalisco.

The Liberty to Trade as Buttressed by National Law (1909) by George Howard Earle, Jr.

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Trade involves the transfer of goods or services from one person or entity to another, often in exchange
for money. A system or network that allows trade is called a market.

An early form of trade, barter, saw the direct exchange of goods and services for other goods and
services.[1][need quotation to verify] Barter involves trading things without the use of money.[1] Later,
one bartering party started to involve precious metals, which gained symbolic as well as practical
importance.[citation needed] Modern traders generally negotiate through a medium of exchange, such
as money. As a result, buying can be separated from selling, or earning. The invention of money (and
later credit, paper money and non-physical money) greatly simplified and promoted trade. Trade
between two traders is called bilateral trade, while trade involving more than two traders is called
multilateral trade.

Trade exists due to specialization and the division of labor, a predominant form of economic activity in
which individuals and groups concentrate on a small aspect of production, but use their output in trades
for other products and needs.[2] Trade exists between regions because different regions may have a
comparative advantage (perceived or real) in the production of some trade-able commodity—including
production of natural resources scarce or limited elsewhere, or because different regions' sizes may
encourage mass production.[3] In such circumstances, trade at market prices between locations can
benefit both locations.

Retail trade consists of the sale of goods or merchandise from a very fixed location[4] (such as a
department store, boutique or kiosk), online or by mail, in small or individual lots for direct consumption
or use by the purchaser.[5] Wholesale trade is defined[by whom?] as traffic in goods that are sold as
merchandise to retailers, or to industrial, commercial, institutional, or other professional business users,
or to other wholesalers and related subordinated services.