Simply, commerce refers to buying and selling various products. Here, the activity of buying or selling can take place between individuals or business entities.
Key Takeaways
- Commerce works as a link between the customers and products
- Commerce ensures a smooth flow of goods and services from the point of production to the end of consumption
- The activities of trade remove the hindrances to exchange
- Warehousing can remove the hindrance of time in commerce
- Various advertising methods can remove the hindrance to promotion
What Is Commerce?
All goods and services produced are to be made available by those who need them This involves a number of additional activities. For example, when somebody produces bread, he has to make it available at convenient locations at the right time.
This involves activities like making people aware of the product, storing the product at the right places, arranging retail outlets, packaging the product, transporting the product, selling the product, and so on.
All these activities taken together are known as Commerce. It provides the necessary link between producers and consumers of goods and services and facilitates the purchase and sale of goods and services. In fact, it performs all functions that are essential for maintaining a smooth and uninterrupted flow of goods and services to the customers. Thus, commerce involves:
I. Buying and selling of goods and services; and
II. Activities essential for the smooth and uninterrupted flow of goods and services from the point of production to the end of consumption.
7 Hindrances Of Commerce
1. Hindrances Of Exchange: Hindrance of exchange is overcome by trade. Trade is an integral part of commerce. It simply refers to the sale, transfer, or exchange of goods and services. It helps in making the goods and services available to ultimate consumers.
2. Hindrance Of Place: Hindrance of
3. Hindrance Of Time: systematic storage of goods can solve the hindrance of time which is known as warehousing.
4. Hindrance Of Financing: Hindrance of financing can be overcome by arranging money and making payments to the seller through banks and other sources which are known as banking.
5. Hindrance Of Risk: hindrance of risk of damage/loss of goods in transit in the warehouse can be solved by insurance.
6. Hindrance Of Information: through the exchange of information with each other by postal and telecom services we can overcome the hindrance of information which is known as communication.
7. Hindrance Of Promotion: The hindrance of promotion can be overcome by posting advertising in different media and taking different marketing strategies.
References:
1. https://www.investopedia.com/terms/c/commerce.asp
2. https://businessjargons.com/commerce.html
Last Updated on October 5, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.
