Trade is the transfer of ownership of goods and services from one person or institution (seller) to another in exchange for receiving something from the buyer. In general, any work (which can be measured and measured) that people give in exchange for a product or service, product or service, or its price, and both are satisfied and pleased with it, is called business. Trade includes two parts: domestic trade and foreign trade. In today’s practice, it is called the trade of goods or services (trade) and to trade better in a short time requires data and knowledge to manage it to achieve the goal. Trade is a mechanism that forms the core of capitalism. Stay tuned to the Digital Currency Signal in this article for more information on trading.
History of trade
Pre-historic
Trade has begun with the beginning of the movement of people in prehistoric times. Commerce is the core of prehistoric people, who traded goods and services before modern innovation and currency creation. Peter Watson traces the history of the business to about 150,000 years ago. It is believed that the first commercial commodity found in the prehistoric period is the archaeological findings of the trade of obsidian (volcanic glass) from Anatolia to Iran and Mesopotamia, as well as firebrands in the Paleolithic period.
Obsidian
The first use of obsidian in the Middle East was during the Lower and Middle Paleolithic. Bosanquet is one of the researchers who discovered the stone trade in excavations in 1901. Trade first began in Southwest Asia. Obsidian is thought to have been used as a material for utensils or cutting tools, although it was more readily available than other materials. They took him and called him a “rich man with a firebrand.” The substance was traded in Europe during the Neolithic period in the Mediterranean. Around 12,000 BC, a network from Anatolia was the main source of trade with the eastern Mediterranean, Iran, and Egypt (according to Zarin’s 1990 study).
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Business expansion
The materials used to make jewelry in Egypt have been traded since 3000 BC. The pioneer of the Silk Road, or Jade Road, was well-known and well-known in the green plains of Eurasia thousands of years ago. In later times, other far-flung trade routes appeared around 3,000 BC, when the Sumerians traded with the Harappan civilization in the Indus Valley in Mesopotamia.
The Phoenicians, known as sea traders, traveled across the Mediterranean, as far as northern Britain, for tin resources to make bronze. To that end, they established Greek ports of commerce called the Merchant Core.
The Achaemenid Empire, in the place of the first great rule of the historical period, really connected the East and the West, and the royal road from Greater Khorasan in eastern Iran to Sard in Anatolia was a trade highway that changed the course of history, a model for later rulers.
Commercial work and providing its infrastructure became the subject of East and West acquaintance. From the beginning of Greek civilization to the collapse of the Roman Empire in the fifth century AD, the trade of valuable spices to Europe from the Far East was a lucrative trade with India. The Roman Empire also helped to expand and increase trade.
They established a stable and secure transportation network, moving commercial goods without fear of piracy. The collapse of the Roman Empire and the Middle Ages brought an unstable bedrock to Western Europe and the collapse of trade networks in the Western world.
Trade continued, however, and flourished among the kingdoms of Africa, the Middle East, India, China, and Southeast Asia. Some trade took place in the West. Medieval Radanists, for example, or a group of Jewish merchants who traded between Christians in Europe and Muslims in the Middle East.
Medieval
During the Middle Ages, Central Asia was the economic center of the world. The Sogdians dominated east and west along the trade route, known as the Silk Road from the 4th to the 8th century AD, with soybeans and Thalassa among their main centers in the north.
They were the main caravan traders of Central Asia. From the 8th to the 11th century, Vikings and Varangians made business trips to Scandinavia. The Vikings traveled to Western Europe, while the Varangians traveled to Russia. Hanseatic is a trade union of cities that monopolized trade in much of northern Europe and the Baltic region between the 13th and 17th centuries.
History of discovery
Vasco da Gama was a pioneer in the European spice trade. Previously, the flow of spices from India to Europe was controlled by Islamic powers, especially Egypt. The spice trade was of great economic importance and stimulated the history of discovery in Europe.
Spices and some of the most valuable commodities were transported from the Eastern world to Europe and sometimes competed for gold. In the sixteenth century, seventeen provinces were the center of free business, with no currency control, and no defense of the free movement of goods.
Trade in East India was dominated by Portugal in the 16th century, the Netherlands in the 17th century, and Britain in the 18th century. The Spanish Empire developed regular business relations across the Atlantic and Pacific. In 1776, Adam Smith published a research paper on the nature and causes of nations’ wealth, criticizing the country’s trade policy.
And argued that nations could benefit from economic expertise only as large corporations. Because the division of labor was limited to the size of the market, he said, countries with access to larger markets would be able to divide labor more effectively and therefore more productively.
Smith said he intended to control imports and exports, which would harm the business of nations as a whole in favor of particular industries. In 1799, the East India Company, formerly the world’s largest company, went bankrupt in part due to increased competitive free trade.
History of wisdom
In 1817, David Ricardo, James Mill, and Robert Thorns demonstrated that the benefit of weak and strong industrial free trade was known in comparative advantage theory. In the principles of political economy and taxation, Ricardo’s theory is still considered strange and is used in advanced economies. It is in the interest of both countries when a producer produces a good and sends it to an inefficient country that is unable to produce it more efficiently.
The excellence of free trade was primarily a national advantage in the mid-19th century. Which was calculated whether any particular country would use it to open its borders to imports? John Stuart Mill showed that a country with monopoly pricing power in the international market can trade in terms of trade policy by maintaining tariffs and responding to these reciprocal relationships.
Ricardo and others have suggested it before. This has been presented as evidence against the global doctrine of free trade, which believed that most of a country’s economic surplus was trade rather than completely free trade policies.
This scenario has developed in the industry over the years by promoting the theory that the government has a “duty” to support young industries, even though it was only for a time for them to develop their full capacity. This policy in many countries led to the industrialization and exclusion of British exporters. Milton Friedman went on to say: “This idea shows that multi-tariff conditions are in favor of the host country, but they are never big for the world.”
Twentieth-century
The Great Depression lasted from 1929 until the late 1930s. During this period, there was a large decline in trade and other economic indicators. The lack of free trade was considered by many to be a major factor in the recession. Only during World War II did the US recession end.
Also during the war, in 1944, 44 countries signed the Bretton Woods Agreement, to prevent national trade barriers, to prevent a recession. Which set up laws and institutions to regulate the international political economy:
the International Monetary Fund and the International Bank for Reconstruction and Development continued (later split into the World Bank and the International Settlement Bank).
These organizations became operational in 1946 after the nations sufficiently ratified the agreement. In 1947, 23 countries agreed to a general agreement on tariffs and trade to promote free trade.
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Free trade
Free trade is a business model in which goods and services are transported between or within countries without government restrictions. These restrictions include taxes and tariffs. The difference between free trade and other trade methods is that the distribution of goods among trading countries is based on artificial prices, which may be a real reflection of supply and demand. The free trade agreement is one of the key elements of free trade zones.
A free market is a free economy in which buyers and sellers trade in terms of price and quantity without any conditions, and there is no obligation to buy or sell. The government frees individuals and the producers produce at their own will, and the government does not intervene to determine the price and quantity of the product. The free market is one of the foundations of the classical school of liberalism in economics, of which Adam Smith and David Ricardo are the founders.
History of free trade
In the past, trade between different nations was based on a policy of economic balance. David Ricardo and Adam Smith were among the first economists to oppose trade policy. Adam Smith, for example, believed that free trade was the reason for the flourishing of civilizations such as ancient Egypt.
Many liberals in Britain, especially in the 19th and early 20th centuries (for example, John Stuart Mill) as well as in the United States in the 20th century (for example, Cordell Hull), believed that free trade promoted peace. . Gradually, according to these beliefs, countries moved towards a free trade model.
The opposition to the ratio of free trade costs against its benefits and profits is discussed among academics. Also, domestic industries often oppose free trade due to the decline in their profits and the increase in the share of imported goods at low prices.
For example,
if the United States reduced its imported sugar tariffs, sugar producers gained profits and cost less, and be forced their price to increase their price. Meanwhile, sugar consumers in the United States are calling for a lower price. The existence of high tariffs in a country means uncertainty for domestic industries to enter global markets.
Such industries remain in their childhood and do not need to move the research, marketing, and customer research. In the current situation in most countries in the world is now members of the World Trade Organization, each of which exercises certain constraints, but has not overcome all tariffs and barriers. Most countries are also members of free trade areas that have lower tariffs among member states.
Most countries have banned foreign airlines from transferring goods and passengers inside their country.
The free trade attributes of free trade are the following features:
- The goods without tariffs and customs or other business barriers
- Free caregivers to markets
- The Free training to market information
- Free laborers in between and within countries
- The free part of the capital in between and within countries
Commercial approvals
Sanctions are trade borders with a particular country that are sometimes used to punish that country for certain actions. Sanctions are a strict form of coercive demarcation and closing the trade route of another country. The United States, for example, has pursued sanctions against Cuba for more than 40 years.
Barriers to trade
Although in most places there are trade borders between countries, world trade is planned with quotas and government borders and is taxed with tariffs. Tariffs are higher on imports, but sometimes countries force other countries to pay tariffs or export subsidies.
These are all called trade barriers. If the government removes trade barriers, it is one of the areas of free trade. A government that implements strategies to support domestic products creates trade barriers.
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Equal access
The Equal Trade Movement, also known as the Trade Equality Movement, promotes the use of labor, and environmental and social standards for the manufacture of goods, especially for Third and Second World economic actors. Whether a business should be planned in the name of human rights; Imports from firms that voluntarily follow fair trade standards or governments that apply them through a mix of labor and trade law.
Equal trade strategies vary widely, from the same ban on goods made using the labor of low-wage slaves to those that processed coffee in the 1980s. NGOs also play an important role in promoting equivalent business standards such as self-governing auditors to comply with the do and don’ts of this view.
What is e-commerce and what are its advantages and disadvantages?
E-commerce means doing business through electronic tools such as the Internet, telephone, television, and computer.
E-commerce was first introduced in the 1960s through electronic data interchange (EDI) on value-added networks (VANs) and grew with the rise of Internet access and the emergence of popular online retailers in the 1990s and early 2000s.
The Amazon website, for example, started in 1995 in Jeff Bezos’s garage as a book shipping business. Or the eBay website, which allows consumers to buy and sell online, introduced online auctions to the world in 1995, and in 1997, the popularity of Beanie Babies dolls became very popular. With the increase in the number of Internet users, many believe that e-commerce will soon become the main way of doing business.
E-commerce
like any digital technology or consumer-centric shopping market, has evolved over the years. As mobile devices become more popular, the mobile phone business has also found its market. With the advent of sites like Facebook and Pinterest, social media has become an important driver for e-commerce.
For example, according to Paymill, since 2014, in sales made on the Shopify e-commerce platform, which were due to ads on social networks, in 85% of cases, buyers using ads on Facebook to this platform have been guided.
The changing market provides a great opportunity for businesses to improve their customer relationship and expand their market in the online world. Global e-commerce sales reached $ 1.2 trillion by 2013, and mobile phone sales in the United States were $ 38 billion, according to Statista.
More than 40% of Internet users (a total of 1 billion people) have purchased goods online. These figures will continue to grow as mobile and Internet usage expands, both in the United States and in emerging markets around the world.
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E-Commerce Categories
In e-commerce, as in traditional commerce, there are four categories: B2B, B2C, C2B, and C2C.
B2B (Business to Business) – Includes companies that do business with each other. For example, manufacturers who sell their products to distributors and wholesalers who sell products to retailers.
B2C (Consumer Business) – Includes businesses that sell goods to the general public through online stores without the need for any human interaction. This is what most people think of e-commerce. An example is the Amazon Online Store.
C2B (Consumer to Business) – In C2B e-commerce, consumers submit projects with specified budgets online, and companies bid on the project. The consumer then reviews the price offers and selects the company of his choice.
The Elance website is an example of this type of e-commerce.
C2C (Consumer To Consumer) – This type of business is done in categorized online advertising, forums, or markets where people can buy and sell goods together. Craigslist, eBay, and Etsy are examples of this type of e-commerce.
Benefits of eCommerce
1. Benefits of e-commerce for customers
Any product you want can be seen on the internet with just a click. Just type the name of the product you want in your favorite search engine so that all the options appear in an organized and orderly manner, after just a few seconds.
Saving time
With e-commerce, you no longer have to drive for hours and browse the shops in hopes of finding what you are looking for. Online stores offer you the full line of their products and use warehouses instead of using the shop to present their products. You will find the products easily and they will reach your door in a few days.
There is a wide range of different options
In e-commerce, the customer can easily compare products without having to go from store to store and find out which vendor offers the best price and has more options to choose from. In the real world, every store has limited space, but the same store can offer all the inventory on the Internet.
Convenience compared
In e-commerce, two-way comparisons are easy to do. When goods are offered online, all their specifications and features are stated and online stores ask you to compare their goods with other goods to find out that they offer the best options and go back to that store to buy.
Ease of finding reviews and comments
Due to the high level of competition, companies are asking you to look at the opinions and reviews of other consumers. There are positive and negative reviews on every website, and in addition to seeing positive reviews and comments about each product, you will also find out the reasons for those who did not like that product.
Coupons and discounts
There are plenty of coupons and discounts for every online business you are looking for, which is great for customers. With sites that act like department stores, you can find items that are up to 80% off! Make the most of this competition and find the best price available.
2. The Benefits of E-Commerce for Businesses
Increase customer base
Customer base is one of the main concerns of all online and offline businesses. Online businesses do not have to worry about having the best features in their city because people from all over the world have access to their products and can come back to them at any time to shop.
sales increase
Online businesses do not need to run a store and can have more online sales with higher profit margins. They can receive money from the customer in various ways to make the purchase faster and easier for the customer. These businesses can sell more products by being available internationally.
24-hour access 365 days a year
If the weather is snowy and the roads are closed or the weather is so hot and humid that we can not even leave the house, or it is a holiday and all the shops in the city are closed, your online business is still open 24 hours a day, 365 days a year for customers. it is open. Doors never close and profits continue to rise.
Expanding the field of trade
The translation is one of the great tools available on the Internet! So an online business does not have to create a site for every language. With the right marketing, customers around the world can find the business website, products, and information of that business without having to leave home.
Simplification of periodic payments
With a little research, any business can create periodic payments for itself. Find the provider that best suits your needs so that invoices can be issued in a consistent manner and payments can be received in the same way and in a consistent manner.
Instant transactions
In e-commerce, you no longer have to wait for a check to be cashed or wait 30 days for other types of payments. Transactions are done immediately or you need a maximum of 2 or 3 days for the money to enter your account through the banking system.
Disadvantages of e-commerce
1. Disadvantages of e-commerce for customers
Privacy and security
Before conducting transactions online, first, check the security certificates (such as the e-Trust symbol and…) of that website. True, online shopping is easy, but no one likes to have their personal information stolen. Many sites are trustworthy, but you should still always research and identify sites that are not secure enough.
Quality
Although in e-commerce, everything is easily accessible, the customer can see and touch the products only after receiving them. Therefore, before buying, you must check the method of returning the product if you are not satisfied with it. Always make sure that there is an option to return the goods before buying.
Hidden costs
The customer is informed of the price of the goods, shipping costs, shipping, and taxes at the time of purchase. But you should be careful, because there may be hidden costs that are not listed on your purchase invoice but appear on the payment form. There may be additional handling fees for moving and loading at the seller’s location (especially in the case of international purchases).
Delay in receipt of goods
Although in most cases, the delivery of products is faster than expected, you should also be prepared to delay the receipt of goods.
For example, a snowstorm at one point can disrupt the entire transportation system in the area. There is also a possibility that your product will be lost or delivered to the wrong address.
Requires internet
Using the Internet is not free, and if you use free Wi-Fi, your data may be stolen on an unsafe website. If you do not want to use the Internet for free or you can not have Internet or a computer in your home, it is better to do your shopping in person.
Lack of personal interaction
Although the rules and regulations of any e-commerce business are available for you to read, there is a lot to read and legal issues may be confusing to you. There is no one with whom you can talk face to face about your questions or concerns about large or important orders.
2. Disadvantages of e-commerce for businesses
Security issues in e-commerce
Although businesses are doing a lot to keep themselves and their customers safe, some people can go through any firewall and get the information they want. We have all seen in recent years that even the biggest and most famous businesses may be hacked.
Payment and financial issues
Many financial institutions take the side of the customer when it comes to bill payment disputes because they want to retain their customer. This causes damage to the e-commerce business when the goods have already been delivered to the customer but the amount paid has been returned to the customer’s account.
Need to spend more on e-commerce infrastructure
You need to pay to ensure that your online business is well run. As the owner of that business, you need to make sure that the transactions are done properly and that the products are displayed in the best way. To ensure this, you need to hire a professional to fix the existing shortcomings.
Referral of goods and after-sales service
The online business infrastructure must be complete and flawless. This also creates other costs for the business, because there are customers who are not satisfied with the quality of the goods after delivery and refer the goods. In particular, some consumers want more than just a refund.
Existence of sufficient internet services
Today all people can always use the Internet, but you should know that there are still areas where network bandwidth can be a problem. Before starting your e-commerce business, make sure your area has the telecommunications bandwidth needed to run your business effectively.
Continuous maintenance
Once a business has started as an e-commerce business, it must be prepared to change to stay compatible. As technology grows, the systems used in your business will also need to be kept up to date or replaced as needed. Or there may be total costs to keep the databases and software running.
Objectives and principles of the World Trade Organization
The main goals of the WORLD TRADE ORGANIZATION (WTO) are the same as the goals of the General Agreement on Tariffs and Trade (GATT):
to improve living standards, provide full employment in member countries and develop production and trade, and make optimal use of global resources, to achieve sustainable development. Considering the optimal use of global resources, preserving the environment so that it is compatible with different levels of economic development of societies, and increasing the share of developing and less developed countries in the growth of international trade, is one of the main goals of the WTO.
In line with these objectives, the WTO manages and facilitates the implementation and development of the objectives of the WTO Agreement and provides the necessary framework for the implementation of the management of multilateral trade agreements. It is also responsible for providing meeting facilities for members to negotiate and consult on multilateral trade relations and to enforce and regulate disputes between members.
The WTO is also required to establish a system for reviewing and reviewing trade policies, and to cooperate with international economic organizations and institutions, such as the International Monetary Fund and the World Bank.
The principles of the WTO are slightly different from the principles set out in the General Agreement on Tariffs and Trade.
In general, the WTO is based on several important principles:
- The principle of non-discrimination and the principle of full-fledged government (MOST FAVORED NATION (MFN) CLAUSE): According to this principle, any trade concessions or tariffs imposed by one country on each member state apply to all member trading partners. Is generalized. The only exception to this principle is economic convergence, as in customs unions between several countries;
- The use of small restrictions in trade such as quotas and issuance of import licenses is prohibited, and protection of domestic industries is possible only through transparent customs tariffs;
- Gradual reduction and stabilization of customs tariffs and the removal of non-tariff trade barriers, except in the case of agricultural products of countries that have problems with payments;
- Establishing a system of preferential tariffs to grant trade concessions to some products of developing countries, to simplify the competition of the products of these countries with the products of the industrialized countries;
- Any action of member countries that has the aspect of DUMPING is prohibited;
- Any treatment of imported goods that is different from the treatment of domestically made goods is prohibited by member states;
- Consulting on trade policies with other members and resolving disputes arising from trade relations through negotiation.
Ministerial Conference
The Ministerial Conference is the highest body of the World Trade Organization, which includes representatives of all members, and its members have the authority to carry out the functions of the Organization, take the necessary measures in this regard, and decide on multilateral trade agreements at the request of each member.
The Ministerial Conference meets at least once every two years. The first WTO Ministerial Conference was held in December 1996 in Singapore, the second in May 1998 in Geneva, and the third in November 1999 in Seattle, USA. The fourth and fifth rounds were held in 2001 and 2003 in Doha, Qatar, and Cancan, Mexico, respectively, and the sixth round is scheduled for December 2005 in Hong Kong.
General Council
The WTO General Council is the highest level of WTO decision-making, commenting on the day-to-day issues and functions of the WTO. The Council is headquartered in Geneva and usually meets every two months, acting on behalf of the Conference of Ministers and reporting directly to the Conference.
The council is based in Geneva and is attended by representatives of all members (usually ambassadors or equivalent). Ms. Amina Chavehir of Kenya currently chairs the council.
Dispute Resolution Pillar:
The General Council sometimes convenes as a Dispute Resolution Pillar. A dispute usually arises when a member state of the organization suspects that another member has entered into a treaty or obligation contrary to the interests of the first government.
These treaties are drafted by the member states of the organization, and these treaties are the result of negotiations between governments. Therefore, the ultimate responsibility for agreeing on these treaties lies with the dispute resolution body.
Pillar of trade policy review: The General Council sometimes meets as a pillar of trade policy review. This pillar has its presidency, rules, and procedures, and revises members’ business policies to prepare them for the trade policy review mechanism.
At the beginning of each year, the chairman and two deputies of this pillar are elected from among the members for one year. This section is currently headed by Dan Stephenson from Canada.
Councils:
- To carry out its functions, the WTO sets up councils, which generally operate under the auspices of the General Counsel.
Commodity Trade Council: The Commodity Trade Council is in charge of multilateral agreements on trade in goods. These agreements include the General Tariff and Trade Agreement and related agreements and 12 other agreements.
The council consists of 10 committees, each working in a specific field (such as agriculture, market access, subsidies, anti-selling measures below cost, etc.). The council is currently chaired by Vesa Tapani Heiman from Finland.
- Services Trade Council: The Services Trade Council is responsible for overseeing the General Services Trade Agreement. Participation in this council is free for all members of the World Trade Organization and is allowed to create complementary elements.
The Financial Services Committee, the Specific Commitments Committee, and the Working Groups of the Rules of Procedure and the Rules of the General Agreement on Trade in Services are among the pillars of the amendment present in this council. The council is currently chaired by Claudia Yorib of Colombia.
- Council on Trade-Related Aspects of Intellectual Property Rights: Intellectual property rights are rights given to individuals to create their ideas. This council oversees the functions of the agreements relating to this property.
word organization
There are three main committees in the World Trade Organization:
- Trade and Development Committee
- Balance of Payments Restrictions Committee
- Budget, Finance, and Organizational Committee
These committees have defined their functions under the Multilateral Trade Agreements and as defined by the General Council, and membership in these committees is open to all members of the World Trade Organization.
The General Council also has two committees under its supervision:
- Trade and Environment Committee;
- Committee on Regional Trade Agreements
Join the World Trade Organization
By the provisions of the Agreement establishing the World Trade Organization, the Contracting Parties to the General Agreement on Tariffs and Trade, as well as the European Communities which accept this Agreement and the Multilateral Trade Agreements, Attached to the General Agreement on Trade in Services, become key members of the World Trade Organization.
The accession of any new member to the Organization, which shall have full independence in the conduct of its trade relations by its multilateral trade agreements, shall be effected by a two-thirds majority of the members of the Conference of Ministers, subject to the terms and conditions agreed between it and the WTO. . The withdrawal of any Member State from the Organization shall take place six months after the date of its notification to the Secretary-General.
General steps of joining the organization
The process of accession to the World Trade Organization is a long and multi-stage process, each stage of which requires its requirements and conditions. A country wishing to join the organization must first notify the other members of its application for membership through the Secretary-General of the Organization.
Following the application of this country in the council meeting and as soon as his membership application is accepted, a working group is formed to consider the application of the applicant country and this country prepares a report of its trade policies and submits it to this group.
Simultaneously with the aforementioned measures, bilateral and multilateral negotiations will take place to determine the terms of membership and reach an agreement between the working groups.
Then the protocol of accession of the country is set, and the obligations of each country in the field of opening the market of its goods and services to other members are determined. The first stage, negotiations, is the beginning of a process that ultimately leads to an agreement between the applicant government and the organization.
All articles and clauses of this contract will be determined through negotiation and agreement. This stage in the WTO is called the eligibility stage and is related to the set of information that each country (applicant) must prepare and provide to the working group, and mainly includes trade policy reports, questions, and answers.
A written report on this report and the required documents and rules are required. The result of the efforts of the working groups will be the preparation of a set of documents that include the report of the working group, the accession protocol, and the table of obligations to access the country’s market for goods and services. The mentioned table is prepared by the secretariat of the organization.
The final stage
is a set that is submitted to the General Council for approval; Voting in the council meeting must take place and the membership of the applicant country is subject to obtaining two-thirds of the votes. One month after the approval of the protocol by the parliament of the applicant country, the membership will take effect.
Conclusion
Today’s world is called the world of information. The world is ignoring the conventional boundaries of geographical maps and the WTO is the organization that fuels this borderlessness. The question that arises for us is: Where in the world do we stand? The answer to this question seems impossible without knowing the mechanism and structure of this great organization and the way of membership in this organization.
The difference between domestic and international trade
Trade is the practice of trading between two given units for the value of goods, products, or services. In any business transaction, the currency is a means of leverage that gives the buyer the desire to obtain the goods or services that are available from a supplier.
Geographical constraints can define how a business is scaled in the local context as well as internationally. Nowadays, when the Internet has empowered the process of globalization, more and more international business activities have taken place. Local businesses remain in your home country.
Domestic trade
Domestic trade is a type of trade that is geographically limited in a country. That includes trade exchanges that take place only within that country. Domestic occupations, also known as domestic occupations, involve a producer and a customer living in the same country. This means that the rules, business practices, and customs used in the transaction are specific to the country.
International trade, on the other hand, is a trade whose production and consumption base are drawn from more than one country. And that isn’t subject to local law to some extent but is in international agreements for the conduct of trade. International trade involves transactions between two or more countries.
In the domestic market, the audience easily trusts you and is persuaded to work with you by talking and negotiating several times.
Domestic trade is not a complicated process and can be easily operated in the domestic market, it requires little experience, it is very easy to build trust, it is easy to transport and there are no customs.
Of course, the European Union has also created an advantage for itself, in that it has created a union between European countries, and therefore, there is no need for customs for the transport and transit of goods between European countries.
This is a great advantage; There are no more borders and the European Union has become practically an integrated country.
Also, this ease of transportation has led to an increase in transactions in the EU.
Comparison between domestic and international trade
- Both types of trade involve a trade-off between a willing buyer and a willing seller.
- No transaction will take place until the two suppliers and the consumer have agreed to do business.
- Also, business in both disciplines is used after the currency agreement. Some local businesses may decide to accept foreign currency payments, just as international trade depends on foreign exchange integration.
Key differences
While domestic trade is defined in terms of geographical constraints, international trade is not limited and transcends a country’s geographical boundaries. Also, while international jobs operate in many countries with a wide range of supply and consumerism, domestic jobs continue to offer only and facilitate limited exchanges between people in a particular country.
At the same time, domestic businesses should not be too cautious or strict about product quality. International businesses must maintain very high standards in the quality of products or services provided. The standards used must be in line with internationally accepted standards.
Another difference is between the two types of trade involving capital and currency. In most cases, starting a domestic business costs less, and the business is generally done using local currency. International businesses, on the other hand, demand a lot of money but depend on foreign currency to standardize their trade.
From the pre-production research perspective, in-house businesses take an easier approach to consumer research, while determining the best product to use. An international business must do extensive research to understand what the customer needs and behaves – when trying to make business efficient.
What is trade law?
Trade in real space and trade in cyberspace or electronics. Today, due to the spread of technology, and the expansion of business relations between individuals, business law can be divided into two branches:
- Trade-in real space;
- Trade-in cyberspace or electronics.
It is obvious that doing business and consequently the formation of trade rights in real space is the principle and its rules can be extended to e-commerce.
Real-time trading rights
In general, four topics are considered in this title:
- Businesspersons and their transactions
- commercial companies
- commercial documents
- Bankruptcy
A detailed examination of each of these topics requires a separate and unique note. However, we will refer to each to better understand the meaning of business law.
A) Businessmen and their transactions:
As mentioned, not only traders and merchants but also ordinary people deal with business in their daily lives. However, there are some issues of business law that are specific to traders, which we will discuss below.
In general, a businessman is someone who does his job to do business transactions, so doing that transaction has a livelihood aspect for him and he earns money through it.
Another is that such transactions are continuous for him. So a person who trades only once without being a means of livelihood or with repetition and continuity, seems that can not be a businessman.
With the expansion of commercial activities, traders and merchants were divided into two categories of natural persons and legal entities. This means that today, not only individuals and individuals are traders, but also the operation of a business can be done in the form of commercial companies.
Among the commercial activities that traders are engaged in are commercial transportation, banking activities, exchange activities, insurance activities, etc., which due to their wide scope, should be considered in a separate note.
B) Commercial companies:
As mentioned, today, commercial activities are no longer carried out only by business people. Commercial companies have also been established to conduct business activities in the form of legal entities.
There are mainly 7 types of commercial companies capable of operating. But the most important ones that have the most application and presence in commercial activities are a public joint-stock company, private joint-stock company, limited liability company, cooperative company, and cooperative company.
Earlier in the article Introduction to Types of Commercial Companies, we examined the nature of commercial companies in Iran, so we will avoid repeating it in this note. However, it should be noted that commercial companies as traders are required to register their names with the company registration authority.
And like business people, they are required to have business offices for traders. They, like real business people, are required to file a tax return based on their fiscal year. (The fiscal year corresponds to the solar year for individuals and begins in April and ends in March.
But for commercial companies it may not correspond to the solar year and shareholders may assign tasks to it.) These are important business law issues regarding commercial companies.
C) Commercial documents:
Nowadays, transactions and transactions are less done through cash. And commercial documents are an alternative to paying for transactions. Promissory notes, bills of exchange, and checks are the most important commercial documents that are mainly used indoors.
But they can also be a source of influence in the international arena. However, it should be noted that commercial documents are one of the most important tools for doing business in commercial law, which in addition to businessmen, ordinary people also use in their business relationships.
Of course, in addition to these documents, there are other documents in the working relationship between traders and merchants, which can be referred to as the bill of lading, insurance policy, warehouse receipt, and so on. Explaining the nature of these documents is beyond the scope of this discussion and we will try to examine them in a special note.
D) Bankruptcy:
Most traders, both real traders, and legal traders, which we examined in section A, are subject to bankruptcy regulations when they are unable to pay their debts. Bankruptcy is one of the most important issues in business law. Which examines the financial condition of traders in terms of payment of their debts and debts.
An overview of the four cases mentioned above can be described as the pillars of commercial law. Commercial law first examines the trader, whether a natural or legal person, then examines his transactions and business transactions and the commercial documents used, and finally, by examining bankruptcy, discusses the continuation or non-continuation of the trader’s life.
We pointed out that today with the development of technology and technology, business in addition to real space in cyberspace and electronics can have many applications. Which is called e-commerce. Finally, we will talk about this type of business.
Electronic Commerce Law
With the proliferation of computers and cyberspace, business and commerce are much easier than ever before. Suppose two merchants from two different countries want to buy and sell goods.
Communicating between them and proposing a deal and accepting it is not done in person. Rather, they conduct business and commercial activities through their e-mail and in cyberspace.
Therefore, the topics of business practices and business documents have many applications in the field of e-commerce and are also prevalent in cyberspace. In general, any business transaction that takes place through unrealistic and electronic space can be examined in the field of e-commerce.
4reasons why online trading is a safe investment
At the beginning of any online business, we need to know where and for what purpose we are going to invest our money, how much profit or experience we are going to make, and where we are going to go.
Here are some reasons why you might want to start an online business.
Low business costs
Properly covered, it will withstand a lot of adverse conditions. This is especially true when there are no costs associated with physical products, distribution, rental, and so on.
Undoubtedly, content creation and development is one of the most important topics in online commerce. Although content production, search engine optimization (SEO), social media, and other marketing channels are time-consuming and costly, they require far fewer resources than virtual companies.
Undoubtedly, reducing costs often leads to greater profitability. There are thousands of unique ways to do business online that will make your business more attractive by reducing costs.
High adaptability to market needs
Marketing is one of the most important components of any business. One of the reasons for the attractiveness of online marketing is that it is possible to track and evaluate the return on investment in this way, while in offline business it is usually not possible to access these items quickly and easily.
In fact, by using the tools and data available, you can quickly adapt to the situation and change your strategy whenever necessary.
If you have two interesting and good ideas but do not know which one is the best option, we suggest you split each of the advertising sections, bulk email system, sales pages, forms, etc., and try one of the methods and strategies of your choice. do.
Google Analytics
Using the Google Analytics service on Google, which shows the number of visitors to a website, you can evaluate the actual changes and customer interest, and whenever you feel that one of the strategies does not work, go to the next method. If the number of visitors is low, increase it with a few tricks.
Fortunately, today, thanks to the rise of social media advertising, targeting a specific audience have become a simple task. Therefore, it is better to identify the target population and then present your services and products to the interested audience.
There are many marketing channels that you can take advantage of. These include blogs, podcasts, movies, and social media, sending bulk emails and using white paper (a document designed to help readers understand a problem, solve a problem, or make a decision), e-books, and more. You can use them in introducing and developing your online business.
In short, all of these factors help you to be more in line with the needs of the market in your online business. In online business, you can very quickly determine which method works and which does not work, and accordingly change your strategy according to the goal quickly.
More flexibility
In offline businesses, you have to have a real space to sell the product. Although there are advantages to having a real space, the high level of flexibility in online businesses is more appealing to many investors and entrepreneurs.
In an online business, you can even do your work from home. In fact, in online commerce, wherever you are in the world, you can get a job, by just accessing the Internet. Making a pain-free income may be a dream come true for many people, but some have achieved it.
If your online business is well-designed and planned, you may not need to hire an employee to maintain, support, or even develop its infrastructure, or even spend a lot of time on your online business.
Thus, popular online businesses will be those economic actors who are willing to invest in various fields or who are looking for jobs that allow them to spend more time with their families with more flexibility.
Low investment risk
A savvy investor does not risk the future of his online business. You do not necessarily have to win at all times, but with the effort, you can reduce the risky actions and risk of unreasonable investments.
In many areas, an online business is less risky than an offline business. Since the level of compatibility and flexibility in online commerce is very high, it usually does not cost much to set up. Sometimes a failed business can be profitable in a short time.
By no means do I want to convey that I recommend for the mother to be inactive. There are many ways to make money online and finding the best way is only possible through experience.
Buying and selling online businesses is much easier than you think. There are many details for selling a business that requires a more complex geographical and operational space. Because this business model does not depend on one geographical location, less energy is expended to maintain it, and as a result, many investors are attracted to online businesses that are also very profitable.
In online commerce, less energy is spent on legal details to invest and the risk is lower.
Starting a new business compared to buying an existing business
You now have the chance to learn the basics and benefits of investing in an online business.
However, you are probably still skeptical about starting a business and do not know if the best option is to buy a pre-existing online business or launch a new one?
Starting a new business requires considerable time and capital, and as you know, success in any business depends on your knowledge and experience in that field. Lack of experience and knowledge of the way of working sometimes causes people to have a misplaced prejudice toward a certain way, and sometimes this one-sided bias leads to the loss of potential opportunities.
The following are some of the reasons why buying a pre-existing online business is a better decision:
A business that has already been set up and is making a profit has passed the test and you do not have to spend time testing, experimenting, and finding your way to profitability.
- When you start working as a new person, you can better understand the mistakes of the previous manager and seek to fix the current bugs and errors with your methods.
- You can gain enough knowledge and experience to continue working in your current business.
- The level of business is defined in proportion to the number of your assets.
Finally
many factors affect the production of goods or services by a business owner. In the context of domestic businesses, the mobility of these factors is easier than being able to mobilize the factors of production for international jobs. Things like transporting and installing production equipment in domestic trade are much easier than in international trade.
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