Topics in CommerceOutbound Marketing explained Inbound Marketing explained Production - Types of Production Commerce: Definitions and Scopes of Commerce Differences between Balance of Trade and Balance of Payments Balance of Payment Deficit and Balance of Payment Surplus Disadvantages of Foreign Trade Divisions of Foreign Trade Advantages of Foreign Trade What is Foreign Trade? Types of Foreign Trade Scheme of Work for Commerce, SS1, First Term Scheme of work for Commerce, SS1, Second Term Scheme of work for Commerce, SS1, Third Term Division of Labour: What is Division of Labour? Forms, Advantages and Disadvantages of Division of Labour Balance of Trade and Balance of Payments Production: Definitions and Examples of Production Deferred payment and its benefits Commodity Market, Types and Importance of Commodity Market What is Marketing? Branches of Marketing
Academic Questions in Commerce
The followings are advantages of division of labour EXCEPT _____.
Which of the following statement is incorrect concerning division of labour?
What does a bearer cheque mean?
What is an order cheque?
Foreign trade or International trade is defined as the exchange of goods, services and capital between two or more nations.
In this article, we will look into the importance, advantages and disadvantages of foreign trade.
The advantages of foreign trade can also be considered as the Importance of foreign trade.
Below are explanations on the advantages or importance of foreign trade:
Using the sale of phones as an instance, some phones may sell for over $400 while others with a similar operating system could sell for less than $100; all thanks to foreign trade.
In short, imported commodities are approved into a country because of their relative cheapness and quality when compared to locally made commodity of similar value.
Some developing countries are blessed with numerous natural and mineral resources but ironically, they lack the facilities and machineries to make them into finished products. Foreign trade becomes important in regards to the utilization of these resources.
As an instance, Nigeria is one of the world's largest exporter of petroleum. They generate a lot of money from this very process (through foreign trade).
Ironically, Nigeria still import the products of petroleum like petrol and kerosene.
The point is: Without foreign trade, petroleum may not have been properly utilized by Nigeria.
When you check out some of the goods and products you enjoy, you will observed that they aren't manufactured by your country.
The point is: You enjoy these imported products; and all thanks to foreign trade.
When certain products are produced in limited or insufficient amounts within a country, the price of such products will be inflated.
Through foreign trade, countries that manufacture a surplus of these products can export them at a cheaper price to those with deficits.
Note: The above process will bring about price stability of the limited products manufactured within the country of deficit production.
Air, water and land mode of transportation have been constantly improved on.
For instance, speed trains are constantly being developed while larger and advanced ships have been built for the sake of foreign trade.
Note: Some countries have excellent road and rail networks that connects to neighboring countries for the purpose of improving foreign trade.
A country indebted to other countries may pay off her debts by exporting their products to these countries.
Note: This is ideal because such indebted country may not have the cash to pay off their creditors.
Foreign trade has brought about division of labour and specialization of production in various countries of the world.
For instance, Nigeria, Saudi Arabia and Qatar are specialized in petroleum, mining and exportation. This singular act has generated trillions of dollars for the respective countries. In fact, this is the major source of their national revenue.
Foreign trade has proven to be crucial in poverty eradication especially in developing countries.
For instance, Nigeria imports various agricultural machineries and these have proven to boost it's economy, alleviate poverty and provide more jobs. This is true because Nigeria now has more active commercial farmers, more people managing these machines and ultimately, more jobs.
Shortage of food and other resources are the aftermath of wars and natural calamities like earthquakes and flood.
The above calamities will negatively and temporarily affect production within these periods. To this end, foreign trade serves as the last resort to stabilize the economy of the affected nations.
Foreign trades have brought the people of various countries together.
For instance, Nigeria has a good business and civil relationship with China; all thanks to foreign trade.
Note: Some Nigerians are beginning to speak the Chinese language while others have married Chinese men and women as a result of the Nigerian/Chinese trade relationship.
Monopoly exists where there are only few producers of certain goods and services. This will directly lead to inflation of such goods and services.
Through foreign trade, citizens are free to import similar products thereby increasing the availability of such products in the market.
Note: When we have a variety of similar products in the market, consumers will have the option to choose. Also Monopoly of these products will be eradicated and prices will fall accordingly.
Without foreign trade, the citizens that make up a country may not enjoy some of the basic necessities of life, for instance food and drugs.
As an instance, in Japan and UK, almost half of their food are imported from other countries.
In developing countries, certain drugs must be imported and this can be critical for national well being.
Note: The term national well being relates to the good health of the citizens of a country.
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Alfred Ajibola is a Medical Biochemist, a passionate Academician with over 7 years of experience, a Versatile Writer, a Web Developer, a Cisco Certified Network Associate and a Cisco CyberOps Associate.
Amazing facts in Commerce
Amazon is an e-commerce website launched in 1995. It did not make any profit for its first seven years.
Amazon's first profit was in 2003. Its founder "Jeff Bezos" is the richest man in the world as at 2018/2019
NOTABLE POINTS IN Commerce
Commerce can be defined as the exchange of goods and services, usually for money and on a large scale that will require the transportation of such goods and services.
Commerce is very important to the life of any Nation for the following reasons:
A public company is not owned by an individual. Usually, it is owned by groups or a very large number of people.
The shares of a public company are traded freely on the stock exchange.
Below are some features of a public company
The four elements of the marketing mix are usually referred to as the 4 “P”. These are:
Think of marketing mix as the set of marketing tools that an industry or company uses to drive or accomplish its marketing objectives in the target market