Commerce, Trade and Industry

Commerce

The Exchange and distribution of goods and services is called Commerce. Commerce can be defined as the sum total of activities which are useful in free and uninterrupted of goods and services between producers and consumers.

Characteristics Of Commerce

1. Commerce is concerned with the exchange of goods and services.

2. Commerce is the sum total of activities which are useful in free and uninterrupted flow of goods and services between the producer and consumer.

3. Commerce is useful to eliminate hindrances of persons through wholesalers and retailers.  

4. Commerce is helpful to provide place utility to goods produced through transportation.

5. Commerce is helpful to provide time utility of goods produced through warehousing.

6. Commerce act as mediator to pass on knowledge of product from producer to customers through advertisement etc.

   

Relationship Between Trade, Commerce And Industry

Industry, Commerce, Trade ara a part of business and are closely related with each other. Industry provides goods and services, Commerce facilities the distribution of goods and services from the producer to consumers. Trade is a Channel of transfer of goods from producer to consumer. The super structure of commerce is built upon the foundation of trade. Therefore industry, Commerce and Trade are interdependent.

Various Types of Aids to Trade

Commerce includes trade and aids to trade. It is concerned with the exchange of goods from the producer to the consumers.

     Trade means buying and selling of goods in order to earn or make profit. Trade creates a link between producers and consumers. Trade may be classified broadly into two categories.

1)      Home Trade

2)      Foreign Trade

                                 

1)      Home Trade: Trade takes place between the individuals of the same country (or) with in the geographical boundaries of a country is called ‘Home Trade’. It is also called as National trade or  Internal trade. It is further divided into a) Wholesale Trade b) Retail Trade.

a)Wholesale Trade: Buying and selling of goods in large quantities is called ‘Wholesale Trade’. A wholesaler buys goods in large quantities from the producers and sells in small quantities to retailers.

b) Retail Trade: Retail traders sell goods in small quantities directly to the consumers. A person who is involved in the retail trade is called Retailer. He maintains all varieties of goods to attract the consumers for sales either in cash or credit.

2)      Foreign Trade: The trade takes place between individuals of different countries is called ‘Foreign Trade’ or ‘International Trade’. Foreign Trade may be again classified into three types- a) Export Trade b) Import Trade and c) Entreport Trade

a) Export Trade: When domestic goods are sold to the other country it is called as export trade. Ex: India sells ready made dresses to America.

b) Import Trade: When the goods are purchased from outside countries for use in the domestic market, it is called import trade. Ex: India buys petrol from Iran.

c) Entreport Trade: When the goods are imported from one country with a view to export the same to another country. Such a trade is called Entreport Trade. This trade is done when the relations between two countries are not harmonious.

Comparison Between Trade, Commerce and Industry

Trade	Commerce	Industry
Meaning: Trade means transfer of ownership of goods and services	Commerce is the process of distribution of goods and services	Industry concerned with production of goods and services.
Utility: Trade creates possession utility.	Commerce creates place and time utility	Industry creates form utility.
Scope: It Includes Home Trade and Foreign Trade	It  includes Trade and Aids to Trade	It Includes all the activities to produce final product.