The Basics of Trade

I’ve been fortunate to read a fantasy novel that one of my friends is working on, and at the very start of the story, the main character arrives on an island via trading ship. One of the very first scenes is set in the marketplace built right next to the piers. It’s a great scene where we get to see how different this new place is from where she’s been before—the food, culture, and even petty criminals are all pieces of information that filter in as the character is introduced to her new environment.

Even though your story might not be centered on a trader, you might find it useful to utilize a trading structure to provide this kind of world-building. Trade, put simply, is the exchange of goods and services. Let’s explore what elements might be most useful for you to create an immersive world.

GOODS VS. SERVICES

Are they the same thing? Nope! Goods are items that are in demand. Yes, food and clothes are probably the first things that will come to mind, but you should also consider luxuries like furniture and tools and raw materials like fuel. Anything that someone needs and is willing to pay for is considered a good. However, depending on where a person is located, their needs will change. Snowsuits aren’t as in demand in Florida as they are in Maine, for example. Goods can also be intangible, like information, which someone might barter for or purchase.

Keep in mind that there are different values placed on goods: price and use. A price value is what someone is willing to pay for an item. Use value is placed on how much use someone can get out of the item. Say you go to a thrift store to look for infant clothes. You find an unstained onesie for $5 and a stained one for $2. Their price values are different, but their use values are the same— they will both clothe an infant and keep them warm and dry.

Unlike goods, a service is an action performed by one person so that another person doesn’t have to do it. Services can range from barbers to childcare workers to entertainers. Depending on the makeup of your character’s society, things like healthcare and education might be a service that one needs to pay for.

Market

Typically when we think of a market, we think of a physical place where trade is happening—lots of colors and sounds and a hub for community. But it’s important to keep in mind that a market is also the system in which trade is conducted. If two people can exchange a good or service, they’re part of the same market. However, if two people need the same good or service but cannot exchange them, they’re not a part of the same market. This can either be due to things like geographical locations (like impassable oceans or mountains) or war (when countries declare war on each other, they generally stop trading).

SUPPLY AND DEMAND

The next component of trade that you’ll want to brush up on is supply and demand. Supply is how much of a good or service is available in the market. Demand is how much others want or need that good or service. These two directly influence each other—low supply equals high demand, and high supply equals low demand. I will always think about the 2020 run on toilet paper. When the supply went down, the demand for it went up. But when the shelves were finally fully stocked again, the demand for it went down.

Like how supply influences demand, demand in turn influences

value. If there’s a high demand for something, it’s value increases. If there’s a low demand for it, the value decreases.

MONETARY SYSTEMS

Barter

Today, we think about trade as the exchange of a good or service for money. But it’s good to note that trade existed way before currencies were standard. This is known as bartering, when a good or service is exchanged for another good or service. For example, someone might be willing to build a house in exchange for young cattle for their farm. Or I might be willing to help a friend move if free lunch is involved. That’s essentially the same thing, right?

Money

A critical turning point for trading historically was the invention of money. This is defined as any item or record that is accepted by a market for payment or repayment.

Money can have different kinds of value:

• COMMODITY: its value is intrinsic, like food and gold

• REPRESENTATIVE: it has no inherent value, but the value is represented by another item, like a paper certificate representing gold in a bank

• FIAT: it has no value beyond what people within the market agree on, like the bank notes that many countries use today

For most of recorded history, intrinsic and representative money has been the most widely used. The most popular intrinsic commodities were things like food, textiles, and precious metals. In a barter system, goods and services would be exchanged directly for another good or service. In a money system, goods and services would be exchanged for either a commodity (like gold) or a representative money (like a certificate or tablet). Then that commodity or representative money could be exchanged for a good or service later on.

Why is coin a very popular form of money for world-building? It’s probably because historically, precious metals were smelted into commodity money. The value of coins was determined by their weight. However, here is where we need to avoid falling into a rabbit hole. Say you have a scene where your character goes to pay for a meal but discovers that they don’t have enough money. You probably don’t need to show them counting out their coins and explaining exactly how little they have.

Instead, the reader’s focus will be on the problem: There’s not enough money. What will your character do next?

A good example of how money is used in a fantasy setting is in Netflix’s “One Piece.” In the manga series, you can break Belly (the world’s main currency) into coin and paper—coin for smaller denominations and paper for larger ones. But in the show, we just know that Belly is the money. We see it exchanged but we don’t need to know the specifics to understand the story.

TRADE PORTS AND CITIES

One final component to consider is where the largest trade hubs are found in your world. We can focus on ports and cities for now.

Ports

Ports can generally be found in strategic locations, like the mouths of rivers, which form natural harbors. These harbors would also need places for safe anchorages— protection from the wind and large waves would be necessary to prevent ships from being capsized before they can unload their cargo.

I will always think about the 2020 run on toilet paper. When the supply went down, the demand went up.

Cities

You’ll probably find larger cities on or very close to rivers. That’s because when cities are being founded, they generally will start at a port and then follow a river away from the coastline. Rivers are a reliable way to move products. Fresh water is also important if your people need it to drink, and it’s also great to have for removing waste from the city.

While this is just a crash course in this subject, I hope it gets you thinking critically about how you can utilize trade in your storytelling. WD