Class 7 Civics

Chain of Markets

Chain of Markets refers to the series of exchange of goods that takes place from the moment the goods are produced to the time they reach the end user i.e. the final consumer. Goods are produced in factories, farms and homes and reach the end user through several channels.

But we do not buy directly from factories or farms. Even the producers will not be willing to sell small quantities like one dress or one kilogram of wheat to the consumers. Hence traders come into picture. Traders are the people in between the producer and the final consumer.

The wholesale trader is the first to buys goods from factories or farms in bulk and stores them in the godown. For example, he may buy 50 to 100 kilograms of rice. He then sells it to other traders. There could be any number of traders involved in the chain. Between these traders, buying and selling takes place. It is because of these traders that goods reach faraway places. The trader who finally sells the product to the consumer is called the retailer. These retailers are the traders we see in the weekly markets or neighbourhood shops or malls.

Markets Everywhere

The markets that we have read about till now are in a specific location and have a specific manner and time of working. However, these days it is not necessary for the consumers to go to the market to buy things. He can do so at the convenience of his home. He can either order goods on phone or use the internet and buy things online.

Websites like Flipkart, Amazon, Local Banya, Big Basket, Grofers, Myntra, Snapdeal, etc. allow us to buy a variety of goods at a click of the mouse! Flipkart and Amazon offer a range of products right like laptops, mobiles, apparels, shoes, books etc.

The medical representatives who come to clinics and nursing homes are also actually selling their goods. Hence buying and selling of goods may not take place only through shops.

These days the use of applications commonly known as apps for buying groceries, hiring taxi services, etc. has become an everyday affair. Big Basket, Grofers and many others have their apps to facilitate buying using mobile phones.

Rise of e-commerce

Now-a-days, number of users who access internet through mobile phones is on the rise. According to various reports by research agencies, internet access through mobile phones will replace the internet acces through desktops and lapotops in a big way. In keeping with this trend, most of the e-commerce portals are making mobile friendly websites and apps. Some of the e-commerce portals are planning to fully replace their desktop friendly websites with either mobile friendly sites or apps. Myntra is a good example as it is planning to have APP only plantform. It is planning to shut down the desktop version of its website. One of the reports states that Myntra pulls in about 80% of its traffic and 60% of sales through its mobile application. It is certain that many other e-commerce portals would follow the trend.

Market for goods used in the manufacturing process

A market exists also for goods that are not directly used by the consumer. For example, fertilizers used by farmers are purchased from a shop in the city. The shopkeeper in turn buys them from factories. The products used in manufacturing and assembling a car, like engine, axles, petrol tanks, etc. are also bought and sold in different markets. Hence a chain of markets exists for all the goods whether directly used by the consumer or not. But we are aware only about the final product and its market.

Markets and equality

Since markets are a platform for buying and selling, more demand for goods and hence more sales would boost the production and the opportunities for people to earn. The characteristics of sellers and buyers of a small shop and big malls are as follows:

Sellers: There is a difference between the small shop owners we see in the weekly market and the ones in a big shopping complex. The former is a small trader with little money whereas the latter is very rich and can spend a huge amount of money to set up the shop. The difference in their earnings is also substantial.

Buyers: The buyers of the weekly market cannot afford even the cheapest of goods whereas the buyers visiting the malls are able to afford the branded goods and other luxury items on sale there.


Retailer: The trader who finally sells to the consumer is called the retailer.

Wholesale: This refers to buying and selling in bulk. Products like fruits, vegetables and flowers have wholesale markets.