What is cash and carry?

The English expression cash and carry It is a type of commercial operation in which the buyer makes the purchase, pays in cash and takes the purchased product. He cash and carry, commonly translated as "pay and take it" is widely used in the wholesale trade.

When a retailer, who owns a small or medium-sized company, or a salesperson needs some type of product, he goes to a wholesale business, chooses the products directly, pays for them and transports them himself. This is what is known as operating “in a free service regime”. This saves costs with Suppliers, with transportation and with services that are not essential in the purchase. In addition, wholesalers sell products in large sizes and in special packages, which lowers the sale price and can be more affordable for SMEs.

This concept was introduced in Germany in the 60s by Dr. Otto Beisheim and is widely used in the hospitality and retail sectors such as small shops. It is also used by some institutions and educational centers. The most important example is that of Makro, a chain of self-service wholesaling stores.

The term cash and carry in the futures market

The concept of cash and carry it is also often applied to the commodity market. In this sense, purchases of materials in a cash market and then sell them and make a profit. The sale is made in what is called the futures market, that is, a sale is made in the future at a price set in the present. For the buyer, the future transport costs will be added to this cash price, thus calculating the cash and carry price.

This concept is very important when operating in futures markets, as other factors will have to be taken into account. costes which are added to the price paid at present.

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