Transcript
Page 1: Chapter 3  - Presentation 3

Business are divided into four broad categories, depending on their primary function and the kinds of products that they sell. Manufacturing Wholesaling Retailing Service

Page 2: Chapter 3  - Presentation 3

Convert raw materials into goods suitable for use and then sell those goods to others.

Two types of Manufacturing Businesses Industrial – sold to other manufacturing

businesses (metal, plastic parts, lumber, and heavy machinery)

Consumer – products that are eventually bought by the public.

Large manufacturing businesses do not normally sell directly to consumers, they normally use wholesalers.

Page 3: Chapter 3  - Presentation 3

Buy goods in large quantities typically from manufacturers and resell them in smaller batches to retailers.

Wholesalers are also know as middlemen, go betweens, distributors, or intermediaries, because they provide a link.

Wholesalers do not generally sell goods to the public.

Page 4: Chapter 3  - Presentation 3

Buy goods, often from wholesalers and sell them directly to the public.

Retailing stores include traditional stores that people go into to purchase products as well as internet sites.

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In order to sell goods to the public, a retailer must have a reseller’s permit which allows them to purchase goods tax free from wholesalers.

A business that is either a wholesale or retail business is commonly referred to as a trade business.

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Provides services to customers for a fee.

Examples include: engineering, legal, medical, accounting, garbage pick up, package delivery, dry cleaning and auto repair.

Most states have licensing requirements for service businesses.

Page 7: Chapter 3  - Presentation 3

Farming is a special type of business. It is a combination of retailing and

manufacturing when goods are produced and sold to the consumers.

Mining Often referred to as an extraction

business. Mining takes resources from the

environment and converts them to a form that can be sold to manufacturers.

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In the 1950’s the dominant industry was manufacturing in the United States.

During the 1950’s and 1960’s America experienced a boom in franchising

A franchise is an arrangement in which an established company sells the rights to a entrepreneur to own an operate that particular type of business.

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By the 1970’s, the service industry made up the dominant force in America’s economic production.

According to the U.S. State Department, the service industry created nearly two-thirds of America’s economic production in 2006.