7-10community-money

Shops Pay for Supplies

Understand that shops must spend money before they can earn it — and that the selling price must cover costs and leave some profit.

In this lesson

Shops Pay for Supplies is part of How Money Moves in a Community. This preview shows how community-money connects to everyday family decisions such as earning, saving, spending choices, goals, approvals, or parent-guided money conversations inside Progress Penguin.

Think about this money choice

Sade's mum runs a small shop. Before she can sell anything, she has to buy the goods first.

How it works

A shop earns money by selling goods, but it must first spend money to buy those goods. The difference between what the shop pays and what it charges is its profit. Understanding this explains why shops charge more than what they paid.

Try a real-life example

Real-life money moment: Sade's mum buys rice from a supplier for 1500 in local currency per bag and sells it in her shop for 2000 in local currency. The 500 in local currency difference covers her rent, electricity, and gives her a small income. — The selling price must be higher than the buying price for a shop to survive.

Activity preview

Move the money slider

Use what you learned to complete this short challenge.

Complete one earning action

Open your tasks and submit a completed task or earning proof for parent review.

Quiz preview

Shops Pay for Supplies means:

Shops only pay for supplies after customers buy all the items

Suppliers give goods to shops for free and charge only after selling

The government provides all supplies to shops at no charge

Businesses spend money buying goods before they can sell them

A bread seller buys flour, yeast, and fuel before selling any bread. This shows:

The cost of supplies is automatically added to the customer's bill

Money must be spent first before income from sales can arrive

The seller expects the government to reimburse all supply costs

Suppliers always give credit and wait for payment after all bread sells