COMMERCE

 

What is commerce?
Commerce refers to all the activities involved in the exchange of goods and services from

producers to consumers, along with the supporting services that make this exchange possible.Commerce is mainly divided into two types of activities:

1.Trade            2.Aids to Trade 

1.Trade

It Refers to buying and selling of goods and services.It creates a link between producers and consumers.Trade is classified into two:

   Internal Trade (Home Trade):Trade that takes  place within the boundaries of a country.Goods are bought and sold in the same country.

Types of Internal Trade:

• Wholesale Trade – Buying in bulk from producers and selling to retailers

Wholesale shop

• Retail Trade – Selling goods directly to consumers in small quantities.

Retail shop

External Trade (Foreign Trade / International Trade):Trade that takes place between two or more countries.Goods are imported or exported across national boundaries.

Types of External Trade:

• Import Trade – Buying goods from foreign countries.
• Export Trade – Selling goods to foreign countries.
• Entrepot Trade – Importing goods from one country and exporting them to another.

2.Auxiliaries to Trade (Aids to Trade):These are the activities that help trade take place smoothly.Types of activities are :

        1.Transportation and communication:       Movement of  goods from producers to  consumers.

      

2.Banking & Finance – Provide credit and payment facilities.

3.Insurance – Protect against risks like theft, damage, accidents.

4.Warehousing – Store goods until they are needed.

5.Advertising – Inform consumers and promote goods.