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What is Commerce?
Commerce is a process through which goods or services are exchanged for money. It also involves buying and selling from people who have items in their homes or businesses.
According to Nelson et al. (2010), “the word ‘commerce’…originally meant simply trade, dealings between people’s produce (goods) or their skills and products (services)”. For example, someone might trade a cow for some fresh vegetables with no monetary exchanges involved.
In today’s global economy, the definition of commerce has become much broader. Nelson et al. (2007) argue that “in the modern world, commerce is a means not only of producing goods and services but also of integrating societies, often across national borders”. Moreover, “commerce includes not just exchanges of products but also exchanges of ideas and information…the need for good communication links among suppliers and customers” (Nelson et al., 2007). Thus, commerce has come to include not only the production and distribution of goods, but also the way in which goods are advertised and sold, such as on television.
In addition to the production of goods and services, commerce involves “the moving of goods through a commercial system-from their origin as raw materials at one end to their ultimate consumption by individuals or groups at the other end” (Nelson et al., 2007). This means that commerce is an integral part of our global supply chains and all forms of transportation.
Types Of Commerce
- Domestic Commerce
Domestic commerce includes international commerce, which is the buying and selling of goods that are produced in one country for sale in another country. An example of this would be a U.S. company that imports raw materials from Africa to mass produce products for sale in the United States, or an importer who buys goods in Asia to sell them in America.
- Industrial Commerce
Industrial commerce refers to the production and manufacturing process whereby raw materials (natural resources) are transformed into manufactured products that are sold to consumers. Products made by industry include textiles, food, clothing, electronics, and manufactured goods (such as automobiles and airplanes). An example would be a company that designs cell phones.
- Commercial Commerce
Commercial commerce involves the selling of commodities to other people. This includes selling products to other businesses for purchase or sale to consumers. Examples include retail businesses that sell products in their stores, farmers who sell crops to local retailers, and companies that sell products on wholesale markets or through middle-men distributors.
- Service Commerce
Service commerce refers to the selling of services to other people. Examples include professional services such as law, accounting, engineering, and medicine; financial services such as banking and investing; and transportation services such as transportation companies.
- Social Commerce
Involves sales of donated goods or services to help others in need. Examples include food banks, clothing closets, homeless shelters, and education programs for children.
- Agricultural Commerce
Agricultural commerce involves the production, processing, and distribution of agricultural products. An example is the sale of farm products to restaurants or grocery stores.
- Environmental Commerce
Environmental commerce is the selling of goods and services where those goods or services are either environmentally friendly, responsible for the preservation of natural resources, or directly related to protecting the environment from harm. An example of this would be selling environmentally friendly products such as solar energy and cars that are designed with low emissions.
Importance Of Commerce
- Commerce provides a means of production, promoting economic growth, wealth generation and money transfer. It can be used to support families, to stimulate growth and development of the economy, and to improve social conditions and justice. For example, by supporting local business you give people who otherwise might not have had a job or steady income to live on the local economy. It also helps to create jobs, generate economic growth, and develop new industries.
- Commerce allows people to make a living doing what they want. It also provides an outlet for creativity and innovation. No matter how great a business idea is you need money to get it off the ground.
- Commerce helps to increase wealth, which can be used in other parts of the economy like financial investments or building your own business (e.g., creating a new product, designing something new).
- Commerce is extremely important because without it, there would be no exchange of money and in turn, no way to pay for the things that you want or even need. Businesses are what make the world go around. They are responsible for creating jobs, making people’s lives easier and more comfortable, and providing products for our daily needs.
- Cooperative principles can be applied in the many ways that commerce is used around the world. Cooperative organization can be used to better our society and the environment, promote economic accountability and sustainability, allow communities and individuals to take control over their own destiny, and promote social improvements by supporting small-scale economic alternatives.
Units Studied Under Commerce
- Socio-economic environment of business
- Managerial Accounting
- Financial Management
- Management Communication
- Business Ethics
- Business Environment and Planning
- Business Environment and Operations
- Marketing Management
- Business Information Systems
- Strategic Management
- Business Cycles
- Operations Management
- Sales Management
- Production And Operations Management
- Finance For Managers
- International Trade
- Business Mathematics
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