INTRODUCTION TO COMMERCE.

Commerce is a part of business that is concerned with the distribution of goods

and services and includes all those activities that facilitate that exchange. It does
not deal with making goods but providing services that make the exchange of
goods and services more efficient.
There are many ways in which commerce can be defined.it may be described as the
study of trade and aids to trade or the study of trade and ancillaries to trade.
It may also be defined as the services that improve the distribution of goods
and services or services that enable the right goods to be at the right place or
the right time and at the right price.
Commerce is all about the wide range of activities or jobs that have to take place
when transporting raw materials from primary industries to manufacturers in the
secondary industry and when transporting the finished goods manufactured by
secondary industries to consumers.
Without these commercial activities, the movement of raw materials, goods and
services between organizations and consumers would not be possible.
There is a wide variety of commercial services supporting the movement of raw
materials, semi-finished products and finished goods between businesses where
buying and selling is taking place. These commercial activities which support trade
are called aids to trade.
Aids to trade can be defined as all the commercial activities that facilitate trade
to take place.

TRADE.
Trade is the buying and selling of goods and services to make a profit. Trade is the
basis of all commercial activity. Without any kind of trade, commercial services
would not be necessary.
Trade is classified into home trade and international trade.
Home trade is the internal trade of a country.i. e buying and selling within a
country. Both buyers and sellers are citizens of that country and speak the same

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language. Home trade involves wholesalers and retailers who may trade in small
and large quantities.
Home trade enables more personal contact between the buyer and the seller who
are more likely to have a good knowledge of the local market. Terms of payment
are easily arranged and the delivery of goods is usually by road or rail.
Home trade is also referred to as local trade or domestic trade.
Home trade is classified into two: Wholesale trade and retail trade.
Wholesale trade is concerned with buying from producers and manufacturers
usually in bulk. Wholesalers break the bulk into smaller quantities and then sell
to retailers. Wholesale trade is an essential service that enables smaller retailers to
obtain goods from a number of different manufactures when they need them. The
retailers are then able to sell to the consumers with an additional profit margin
added to the cost price.
Retail trade is the selling of goods (usually in small quantities) and services to
consumers who make use of them for their own purpose. Retail trade takes place in
shops in villages. Towns and cities but with improvement in technology internet
shopping is becoming important.

International trade is the external trade of a country.it involves buying and

selling between countries with buyers living in different countries from the sellers.
International trade involves importers and exporters who usually deal in large
quantities.
International trade is also called foreign trade or overseas trade.
Most countries are not self sufficient so foreign trade is very important to them.
Foreign trade widens the variety of goods and services available in a country,
raises the standard of living of that country and also disposes a country’s surplus.
International trade is classified into two: export trade and import trade.
Export trade is the sale of goods and services to buyers in other countries to
dispose of their surplus.
Import trade is the buying and selling of goods and services from sellers in other
countries.

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International trade is very important because it allows consumers to obtain a much
greater range of materials and products that are often not available in their own
country.

Importance of commerce to the economy of a country.

➢ Commerce ensures a free and smooth flow of goods from producers to
consumers.
➢ Commerce provides the advantage of specialization. A country can choose
to produce a particular product and sell to the international markets.
➢ It helps to better satisfy human wants by collecting and distributing goods.
➢ Commerce provides the necessary link between producers and consumers of
goods.
➢ Commerce generates employment opportunities.
➢ Commerce encourages international trade.

AIDS TO TRADE.
Aids to trade are the commercial services that facilitate trade to take place.i. e
they make trade possible.
Aids to trade can also be defined as commercial services which assist the
functioning of trade.
1. Banking and finance.
Banks and other financial institutions make it possible for traders to obtain finance
so that they can purchase raw materials, equipment, land and buildings that are
necessary if they are to produce goods and services.
Banking allows sellers to receive payments into their bank accounts and deposits
are stored safely.
Banks offer many related services such as bank statements and ATMs and provide
internet and telephone banking to their customers. Banks also provide finance for

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trade and commercial activities in the form of loans, overdrafts and mortgages and
offer services for savers to earn interest.
2. Communication.
Communication enables people to contact one another both at home and abroad
and to transmit and receive commercial information. Buyers and sellers can make
transactions over short and long distances using a variety of communication
methods. The development of the internet has made communication much more
immediate and has speeded up the communication process. This means trade is
conducted faster across the world.
Traders need to be in communication to provide information, agree to terms of
sale, arrange delivery details and deal with after sale issues.
3. Advertising.
Advertising is an important factor in commerce since goods have to be marketed so
that consumers are aware that these products exist. The number of products and
services sold depends on how well a product has been advertised and promoted to
their customers.
Advertising is used to introduce new products and services, to inform people of
new changes in products or to persuade them to buy. Without advertising, no one
would know the existence of goods and services and there would be no need of
producing them.
4. Transport.
Transport is the movement of goods, raw materials and equipment and people from
one place to another.it may be between primary producers and manufacturers,
manufacturers to wholesalers, wholesalers to retailers.
It may be delivery of goods to consumers.
Transport enables people to go to work.it helps to extend the markets for goods.
Transport may take many forms-roads, rail, air, sea, pipeline.
Without these forms of transport, people would be confined to their immediate
areas and would be forced to trade locally.

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 5. Warehousing.
Warehousing provides storage of goods after processing or manufacturing and
after purchase.it enables goods to be stored until they are required. The goods
maybe raw materials, semi-manufactured goods or finished goods.
Goods can be stored for a long time to maintain supplies, to prevent fluctuation in
prices or to cope with seasonal demand.
Warehousing is essential since it ensure that’s goods are stored safely.
6. Insurance.
There is a great deal of movement of material and goods in the production chain,
so there is always a risk that they may be damaged, destroyed or stolen.
Insurance is an essential aid to trade since people and business obtain protection by
payment of premiums against losses which result from risks such as fire, theft,
burglary etc.
Insurance provide financial protection and it enables many businesses to trade with
confidence.

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