Before learning about the chain of markets, understand the market first. A market is a place where things are sold and bought by buyers and sellers. It creates a connection between the producer and the customer. Markets can be classified as weekly markets, shops, shopping complexes, or malls. Various markets earn different amounts of money.
It relies on the sort of investment made by the vendor and the customer’s purchasing power. Goods are now also sold by online marketing and home delivery.
Chain of markets
The goods like vegetables and fruits are produced at farms while others like shoes, leather goods, clothes, medicines, etc, are produced in factories. The customer does not go to the factories or farms to buy goods. He buys these goods either from the weekly markets, neighborhood shops, or from the shopping complexes.
The question arises how do the traders procure the items that they sell to the customers? The answer to this lies in the chain of markets that exist everywhere.
Let us take an example of a vegetable.
The vegetable is grown in the field. From the field, it is transported to the wholesale market. From the wholesale market, it is purchased by the Hawkers. From the hawkers, we buy the vegetables. So one can see, the steps through which the product goes before landing onto us.
Explain how a market chain is formed.
When a group of traders transports goods from producers to consumers, they constitute a market chain. As a result, wholesale markets exist where other dealers can purchase things in bulk. These dealers then sell the goods to consumers in weekly marketplaces, forming a market chain. The objective of the chain is to transport items from producers in remote locations to consumers in towns and cities.
Importance of chain of markets
A market chain meets the needs of both producers and consumers. Because a producer cannot sell a small number of goods to a single consumer, and consumers cannot buy huge quantities of goods from producers. As a result, wholesalers, retailers, and other intermediaries are needed to connect producers and customers.