Internal trade can be classified into two types:

1. Wholesale Trade:

It means buying and selling of goods in large quantities. Goods are sold to industrial users or institutional buyers. A wholesaler buys goods in large quantities from the producers and sells them directly to the retailers or dealers. He specialises in one line or limited variety of goods. He has to maintain large quantity of stock and therefore should have ample of resources available at his credit.

2. Retail Trade:


It means buying in small quantities from the wholesaler and selling in small quantities to the consumers. The goods are bought by the retailers from the wholesalers or the producers and sold to the consumers. Retailer acts as a link between wholesalers and the customers. He maintains wide variety of goods, as he does not specialise in one line of goods. Retail trade is the final stage of distribution.