Trade Cycle: Features, Meaning, Theories | Definition by CodeTextPro

The e-Commerce Trade Cycle

Trade Cycle:

What is Trade Cycle?

A trade cycle is the series of exchanges, between a customer and supplier that take place when a commercial exchange is executed. E-commerce can be applied to all (if not, most) of the phases of the trade cycle. So when one or more phases of a trade cycle are executed via Electronic medium (e.g., Internet), it is called E-Commerce Trade Cycle.


A general trade cycle consists of:

Pre-Sales: Finding a supplier and agreeing the terms.
Execution: Selecting goods and taking delivery.
Settlement: Invoice (if any) and payment.
After-Sales: Following up complaints or providing maintenance.


The above four phases can further subdivided into following seven phases:

Trade Cycle in Ecommerce

Almost all organizations involved in trade follow a particular pattern of the trade cycle, which generally varies in accordance to the type of organization involved in the trade, the amount and frequency of trade between companies and upon the nature of goods or service being exchanged.


For business-to-business transactions the trade cycle typically involves the provision of credit with execution preceding settlement whereas in consumer-to-business these two steps are typically co-incident.

The nature of the trade cycle can indicate the e-Commerce technology most suited to the exchange.