COMMERCE AND ITS
CLASSIFICATIONS
BS chapter 1
COMMERCE
Commerce includes two types of activities.
● Trade
● Auxiliaries of trade
In general buying and selling is trade the support system
which facilitates trade is auxiliaries of trade.
COMMERCE
Commerce provides It maintains free flow
link b/w producers of goods.
and consumers.
All the activities which helps Hindrances may caused by
in effective rendering of trade person , place, time, risk,
is supported by auxiliaries. finance etc.,each be met by
different auxiliaries.
COMMERCE -Hindrances in managing
trade
Person - good availability of goods and customer service.
Place - effective transport
Time - storage and holding in warehousing
Risk - All goods are subject to risk which covered by insurance
Finance - Banking and financial institutions
Promotion - Advertising
TRADE
● Essential part of business
● It helps in the availability of goods to ultimate
consumer.
● Business men act as middlemen and elevate
the trade to large scale.
● Trade classified into two categories
1. Internal
2. External
Internal Trade
● Concerned within
geographical
boundaries.
● Further divided
into
1. Wholesale
2. Retail
External Trade
● Trade between two individuals or organisation
operating in more than two countries.
● If goods purchased from other countries its
import
● If goods sold to other countries its export
● When goods imported to export its entrepot.
E.g. Spice market Europe, Singapore rubber
entrepot, petroleum and chemical products in
India.
Auxiliaries to trade
Activities They provide They support
Referred as They are the
supportive help
meant for services as it integral part in removing
through transport,
assisting hindrances in
naturally banking, of commerce
insurance, b/w production
trade known facilitate and
warehousing, and
as auxiliaries trade and advertising etc., business. distribution of
to trade. industrial
hence they support
goods.
entire business
activities. activity.
dolor
dolorsit
sitamet
ametatat
01 Transport ● Of
t place
Donec risus dolor porta
nec at adipiscing
Lorem ipsum venenatis
02 dolor sit amet at
Communication ● Pharetra
Of contact
Donec luctus
risus felis
dolor porta
nec at adipiscing
Lorem ipsum ● Proin in tellus felis
venenatis
03 Warehousing
dolor sit amet at ●
● Of timerisus
volutpat
Pharetra
Donec luctus felis
dolor porta
nec at adipiscing
Lorem ipsum ● Proin in tellus felis
venenatis
04 Insurance
dolor sit amet at volutpat
● Of risk risus
Pharetra
Donec luctus felis
dolor porta
nec at adipiscing
Lorem ipsum ● Proin in tellus felis
venenatis
05 Banking
dolor sit amet at ● Of finance
volutpat
Pharetra luctus felis
nec at adipiscing ● Proin in tellus felis
06 Advertising ● volutpat
Of information
Transportation and Communication
● Finished goods moved from the place of
production to different markets.
● Raw materials are supplied to manufacturing
units
● Generally happens through road, rail, shipping
and air freight.
● Good communication facilitates in keeping
producers, traders and consumers keep
connected.
● Communication in various forms including
postal, using network, and telephone.
Banking and finance
● In any business funds are necessary to
meet day to day expenses and acquiring
assets.
● Necessary funds are acquired from
banks to overcome finance problems.
● Commercial banks lend money by
overdraft, cash and credit facilities,
loans and advances.
● They also help in other function like
collection of cheques, payment in
foreign trade.
● Raising capital from public.
Insurance
● Business involves various risks.
● Assets need to be protected from fire,
theft
● Deal with loss during transit
● Protection to employees
● Insurance covers all these risks by
regular payment of premiums
● Loss to be recovered from insurance
companies.
Warehousing
● It is special arrangement made for
storage of goods to avoid loss or damage
● Facilitates the availability when needed
● Continuous supply helps in maintaining
reasonable price in market.
Advertising
● Advertising is necessary tool in promotion
of all consumer goods and services.
● There are numerous manufacturers in market
irrespective of size in market.
● Advertising explain features, price can help
in reaching potential customers.
● Repeated promotions helps to survive in the
market
● Furthermore it induces new potential buyers
