Trade Area

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  • A concept with domestic and international dimensions. From a domestic perspective, a trade area incorporates the geographic proximity (trade zone) of customers and sellers. It is the geographic region from which a town gets most of its customers. From an international perspective, a trade area is normally associated with the economic integration of contiguous countries, known as a free-trade area.

    Most retail businesses have a relatively fixed area where customers come from to do business. Businesses in a trade area attract customers from the neighborhood or workers who are employed in the vicinity. Changes in the residential size of the neighborhood or in job availability affect the viability of the selling zone. The trade area for most small businesses is estimated to be about 3 ...

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