Market: Types of Market

Types of Market:

Market can be categorized into various types based on the following criteria:

1. Commodities that are bought and sold.

2. Channel of distribution. They include the wholesale market and retail market.
   Please read on the concept of a retail market here.

3. Market structure. (Degree of competition and prices).

In this article, we will discuss on the types of market based on commodity bought or sold.

Please read on the concept of a market in economics here.

Types of Market based on Commodities Bought and Sold

Some overlaps may occur during a careful analysis of the various types of market based on the commodities bought and sold.

The market types (based on commodities bought and sold) are explained below:

1. Primary Products Market: Primary products refers to agricultural produce in their unprocessed (raw) form. In a primary market, unprocessed agricultural products are bought and sold.

Whenever we buy foodstuffs in their raw form, we may likely purchase them from the primary products market.

Similarly, manufacturing industries will usually buy their raw materials (primary products) from this market.

Please read on the types of production here.

2. Consumer Goods Market: This is a market where consumer goods (processed food and other finished products) are bought and sold.

Products like creams, clothes, shoes, processed food and books are bought in the consumer goods market.

You can read on scale of preference and opportunity cost here.

3. Black Market: This is a market setup for the purpose of selling various products outside the government's rader.

Oftentimes, illegal products like firearms, drugs and various computer malware are purchased here. This purchases may be done through a medium termed as dark web.

Understand that crypto currencies are well accepted as means of payment in the black market.

You can read on cheques (checks) as methods of payments here.

Note: A black market has its advantages and disadvantages.

Please read more on black market, its advantages and disadvantages.

4. Auction Market: An auction market is one where a seller will only sell a product to the highest bidder.

Auction markets are usually conducted when one is willing to put out an iconic and legendary material for sale.

Auction market may also be carried out in various religious launchings like harvest and bazaar celebrations.

5. Knowledge Market: Information and knowledge on various products and services are exchanged in the knowledge market. (This is similar to the functions of search engines like Google).

Functionally, knowledge markets can also stimulate the desire to satisfy the demand of something that's yet to exist. (Search engines may not be able to offer this knowledge).

Len Academy is an example of a knowledge market that offers all its services for free. Some other platforms do act as knowledge markets but not without making some form of payments; (which may not be a bad idea).

Also, websites that allow readers to post questions while other readers profer answers to such questions are also considered as knowledge markets.

You can attempt Len Academy questions on various academic subjects here.

Note: An individual's data may be collected in the knowledge market.

6. Physical Market: A physical market is a market whereby the buyers physically meet the sellers before purchases can be made.

Supermarkets, shopping malls and the general community markets are examples of physical market.

Note: The buyer will usually pay via cash or Point of Sale (PoS) to the seller in a physical market.

Please read on methods of payment and characteristics of legal tender here.

7. Virtual or Non Physical Markets: A market is considered to be virtual when the buyers and sellers transact business withing physically meeting each other.

The internet provides an excellent platform for the workings of a virtual market. In this case, such business is done online. Examples of virtual market include Jumia, Amazon, eBay and web host providers.

As a web developer, I have never visited the company that host my websites. I only communicate securely with them online while aslo making all my payments online.

Please read on the internet, world wide web and notable dates of internet evolution here.

It is noteworthy to state that online payment solutions are usually integrated into the web application (website) in order to facilitate payments (from a buyer to the seller in an online market). Importantly, the buyers ought to be careful when making online financial transactions due to the emergence of internet fraud.

Please read more on debit cards and credit cards here.

8. Labour Market: The labour market provides a platform where various job seekers (graduates and non-graduated) link up with the employers of labour in order to be hired.

In developing countries, the labour market will always appear to be populated with a large pool of job seekers searching for the few available jobs. To this end, the government of such countries is requires to make favourable policies for the masses, while also establishing the basic infrastructure towards attracting foreign investors into their country.

You can read more on the concept of a government here.

9. Factor Market: The factors of production are sold in the factor market. Factors of production include:

• Land

• Labour

• Capital

• Entrepreneur

10. Financial Market: Financial markets are involved in the exchange of liquid assets; (that is, money).

Note: Banks are generally involved in the financial market.

Financial market can be put into the followings:

I. Stock Exchange Market: This is a market that provide investors with an opportunity to buy shares, stocks and securities.

Examples of Stock Exchange Markets are the Nigerian Stock Exchange (NSE), Nasdaq, New York Stock Exchange, London Stock Exchange, Euronext Paris, SIX Swiss Exchange, B3, Canadian Securities Exchange and so on.

II. Bond Market: In a bond market, buyers and sellers are involved in the exchange of debt securities which are usually in agreement with the conditions of a bond.

A bond (in bond market) is a contract made by two or more parties in order to make one of the parties return money with interest at fixed intervals.

In a bond market, If a debtor fails to return the money at the appropriate time or interval, whatever consequent action agreed in the contract between both parties would be effected. An example of such consequent action could be the sale of the debtor's properties.

You can read on the disadvantages of money here.

III. Foreign Exchange Market: Currency are traded in this market. Usually, one person buys or exchanges a currency with the equivalent of another currency.

Since the foreign exchange market focuses more on currency exchange, it's therefore often referred to as a currency market.

Forex (which means Foreign Exchange) is a typical example of a Foreign Exchange Market.

You can read on global acronyms and their meanings here.

IV. Capital Market: This is a market that serves short and long term loans to individuals and institutions.

Capital Market will usually serve the needs of entrepreneurs who are in need of capital to start up a business.

Please read on how to start a home based fish farming here.

V. Money Market: This is a market where short term loans are granted.

Microfinance banks are considered to be an important aspect of the money market especially in the rural areas of developing nations. This is so because they will often give out short term loans to those who require it.

Please read on business structure (sole proprietorship) here.