Page 1 - L6

SAI INTERNATIONAL SCHOOL

CLASSS XI
SUBJECT: BUSINESS STUDIES

CHAPTER -09

Internal Trade

Topics: Mail Order Houses, Consumer Cooperative Store, Features: Advantages, Limitations

(LESSON NOTES-45)

Mail Order Houses

Mail order houses are the retail outlets that sell their merchandise through mail.

There is generally no direct personal contact between the buyers and the sellers in this type of

trading. For obtaining orders, potential customers are approached through advertisements in
newspapers or magazines, circulars, catalogues, samples and bills, and price lists sent to them

by post.

All the relevant information about the products such as the price, features, delivery terms,
terms of payment, etc., are described in the advertisement. On receiving the orders, the items

are carefully scrutinized with respect to the specifications asked for by the buyers and are

complied with through the post office.

There can be different alternatives for receiving payments.
 First, the customers may be asked to make full payment in advance.

 Second, the goods may be sent by Value Payable Post (VPP). Under this arrangement,

the goods are sent through post and are delivered to the customers only on making full

payment for the same.
 Third, the goods may be sent through a bank, which is instructed to deliver the articles

to the customers. In this arrangement there is no risk of bad debt, as the goods are

handed over to the buyers only after he makes full payment. However, there is a need

to ensure the buyers that the goods dispatched are in accordance with their
specifications. This type of business is not suitable for all types of products.