We need different types of commodities to fulfill our wants. All these commodities are not produced by the person himself. He buys products which are produced by others. The people from whom we purchase the commodities are not producers. These people buy goods from the producers and sell these purchased commodities to the buyers. Those people who sell and purchase are the intermediaries.
The purchasing and selling of commodities by them are known as trade. It shows that trade is an intermediary work. The goods produced by the producers do not directly come to the hands of the buyers but it reaches with the help of businessmen.
Businessmen do not purchase the commodities for their own use but they purchase the commodities to sell it to others and get profit. So businessmen are both sellers and buyers. It implies that purchasing is to sell to others which are known as trade.
Trade starts from the producers and ends in the hands of buyers. Buyers need products in small quantity known as retail trade and the people who do it are known as retailers. These retailers are found in villages, towns and cities.
Retailers may purchase commodities directly from the producers but large producers do not sell their products to retailers. They sell their products in large quantities to big businessmen. Retailers purchase goods from these big businessmen.
The businessmen in between producers and retailers are known as wholesalers and their business is known as wholesale trade. It means wholesalers purchase in more quantity from producers and sell them in less and less quantities to the retailers and retailers sell these goods to the buyers in less and less quantity.