Peripherality has two main economic components: remoteness, creating high trade costs, and small size, limiting the extent to which sectors can benefit from economies of scale. This paper is a theoretical exploration of peripherality based on a model in which there are many sectors, differing only in the extent to which they are tradable. Sectoral differences in trade costs shape the pattern of trade and the structure of production, suggesting that peripheral countries will be active in sectors with low trade costs and in sectors with high trade costs, while demand in sectors with intermediate levels of trade costs will be met by imports. The model explores different representations of the supply side of the economy, including national product differentiation (Armington), firm level differentiation with monopolistic competition, and the presence of sector level economies of scale. These features enable intra-industry trade, while also increasing specialisation (the extent to which output levels vary across sectors). Analysis indicates that the real income cost of remoteness and small scale are considerable and are much larger than suggested in traditional models of international trade. These costs are amplified by monopolistic competition and by sector level increasing returns to scale. Evidently, there are many details and many other considerations that should be taken into account in a full study of the implications of peripherality for any particular economy. These include configurations of trade costs, input-output structures, sectoral returns to scale, and underlying comparative advantage. However, this paper identifies some key mechanisms and relationships, and points to what should not be left out of more detailed studies.