Tradeis the process of exchanging goods and services for money. It includes the act of supplying raw materials to the producers and finished goods to the consumers with the view to earn profit.
There are certain steps which are followed in conducting trade. The step begins with making inquiry and ends with paying the amount of goods purchased. These steps are followed one after another serially. These are also known as methods of trade which are as follows: -
The buyer/ importer makes anenquiry with several suppliers about the goods to be purchased writing an enquiry letter. The enquiry is done for obtaining information regarding the quality, quantity, price, discount offeredterms of payments and other terms and conditions of trade. The main aim of making an enquiry is to find out the best supplier from whom the goods can be purchased at the least price and the most favourable terms and conditions.
The seller/ exporter give a written reply against the enquiry made by the buyer/ importer. The written reply given by the seller/ exporter quoting the price of the goods is called the letter of quotation. The seller/ exporter should reply to the enquiry including all the information as requested by the buyer/ importer honestly and correctly. In fact, quality of the reply letter enables the seller/ exporter to get an opportunity to supply the goods.
The buyer/ importer compare the quality, price, discount and other terms and conditions of trade as indicated by seller/ exporters in their reply letters. After comparison, the buyer/ importer enable to select the best supplier. He places an order to such selected supplier for the goods through an order letter.
It is given by the seller/ exporter in response to the order placed by the buyer/ importer. As soon as the seller/ exporter get an order from the buyer/ importer, he acknowledges the order through a letter known as acknowledgement letter.
The seller/ exporter collect the goods to meet the order of the buyer/ importer either from his own godown or from other suppliers. If the seller/ exporter have no required quantity of the goods in stock, he immediately collects the needed quantity from the local market and makes the goods ready for packing.