Turnover is one of the main and most important indicators in the economy of trading activities. How is this concept interpreted? It is generally accepted that commodity circulation is an action based on the exchange of a particular product for currency. Thus, there is a continuous process of movement of goods and services, carried out through the preparation of agreements or transactions of sale.
This concept can be considered from two points of view. On the one hand, commodity circulation is a movement in which the emphasis is on the commodity as a direct object of trading activity. On the other hand, all attention is focused on the purchase and sale transaction, since it is a tool for promoting the goods first to the market, and then directly to the consumer.
Currently, there are separate organizations specializing in conducting trading activities. They sell the goods of the manufacturer and receive their percentage of the transaction. Products come from the manufacturer on consignment basis. Thus, the company has only the right to sell a particular product. For the business entity, commodity circulation is a way to achieve an economic effect, that is, to maximize profits. And at the market level, this indicator reflects the degree of equipment of the population with necessary goods, and therefore, in some way characterizes the standard of living of citizens.
Turnover can be divided into two main groups: wholesale and retail. The first reveals the process of movement of goods to the place where they are directly transferred. We can say that retail turnover is the final stage of product movement. If we consider this concept as an economic indicator, we can present it in the form of a monetary expression of the volume of goods released to the market. On the one hand, retail trade turnover is reflected in the amount of income from sales, and on the other hand, it characterizes the level of population’s expenses for the purchase of products.
According to the current legislation, this indicator includes not only the volume of revenue from the sale of the assortment to the public, but also the volume of sales to other counterparties purchasing goods for the purpose of serving citizens. The indicator of retail turnover is able to fully reflect the degree of development of the enterprise, the welfare of the target audience and even the general situation of the national economy.
Wholesale turnover is the movement of products to other trading organizations for the purpose of further resale or to other enterprises for use in their production activities as raw materials. Unlike retail, in wholesale trade products remain in circulation.
You can classify the wholesale turnover by purpose: intrasystem and for sale. The first category is inherent in large-scale commercial companies, as it reflects the movement of goods from a trading company to another wholesale seller. And in accordance with the criterion for implementation, the company delivers finished products to retail companies in the catering network for the purpose of clearing exchange, as well as for export. When summing up the results of indicators of these two categories, you can get the gross or aggregate wholesale turnover.
A clear distinction is made between the concepts of “composition” and “value” of commodity circulation. In no case can they be identified. The composition of the indicator reveals various types of sales, and its value represents the amount of sales revenue, cash on hand and funds in bank accounts. This separation is due to the fact that trade can be considered as a qualitative and quantitative indicator.