Commerce is a vast field, where you can enjoy a great learning experience once you enter this particular field.
What is Commerce? Meaning, Importance, Feature and Scope of Commerce - (2019)
So let start with a today topic,
 |
| Commerce |
Commerce is a branch of Business, which means commerce is an exchange of goods and services between businesses or entities.
The meaning of the term 'Commerce' represents that particular domain of knowledge which deals with the concepts, principles, theories, processes and skill that could be applied in the proper conduct of all tasks and transactions related to commercial activities.
Commerce ensures us a free and smooth flow of goods from producers to consumers. People are now able to buy goods produced anywhere in the world.
Commerce ensures us a free and smooth flow of goods from producers to consumers. People are now able to buy goods produced anywhere in the world.
In simple words,
Commerce is an activity which was started from the producer and end with consumers.
Definition of Commerce:
According to James Stephenson:
"Commerce is an organized system for the exchange of goods between the members of the industrial world".
In a broader sense:
"Commerce is that part of business which is concerned with the exchange of goods and services and includes all those activities which directly or indirectly facilitate that exchange".
According to Dr.Evelyn Thomas:
"Commerce is a term that embraces all those functions involved in the making, buying, selling and transport of goods."
Who is the Father of Commerce:
How many of you know,
I know maximum of you know.....
but many of my friends don't.....
Don't worry,
I explain.....
Let start:
Poseidon - is a father of Commerce:
According to Greek mythology, Poseidon is considered the father of commerce. As he is the god of the sea also. And it is across the sea that the great ships have sailed for centuries to move goods and materials between ports which is more important for commerce and trade.
Importance of commerce:
1. Satisfying human wants:
The first main importance of commerce is that it satisfy human wants.
As we know that humans wants are unlimited and resources are limited. So to fulfill these type of requirement we require huge resources. How we can get resources, by distribution and distribution is only possible by commerce.
So in simple word, commerce help us to satisfy human wants by making availability of resources.
2. Employment opportunity:
Growth of commerce means growth of agencies of trade such as industries, banking, advertising, transport, etc. When these agencies grow, number of people are than require for the functioning.
Thus development and growth of commerce generate more and more employment opportunities.
3. Increase national income and wealth:
When more and more demand and supply increase, production also increases with that national income also get increases. In developed country, more than 80% of total national income are coming from manufacturing industries and commerce together.
It also helps to earn more foreign exchange.
Thus, commerce helps to increases national income and wealth.
4. Helps to improve Standard of living:
Standard of living refers to quality of life which peoples are enjoying in their society.
When people consumes more products his standard of living get automatic improves. Commerce helps us to get what we want at right time, at right place and at right price.
Thus, commerce helps us to improve our standard of living.
5. Link between Producers and Consumers:
Commerce make link between producers and consumers through retailers and wholesalers.
Producers can easily get the information of consumers ( likes and dislikes ) from wholesalers and retailers.
Who are wholesalers and retailers:
Wholesalers meaning:
Wholesalers are those peoples or firms which purchase product from producers in large quantity and resells it to different retailers in less quantity and in low price.
Retailers meaning:
Retailers are those person or business which purchases good from different wholesalers and from different manufactures and sell it to consumers.
Consumers get the information of new and upcoming products.
Consumers also get the information of new products from wholesalers and retailers.
1. Hindrance of person:
Hindrance of person is a hindrance related to lack of contact between producers and consumers.
Producers get many difficulty to find the buyers who want to buy such goods.
and,
Consumers also face many problem to find the sellers who would satisfy his needs at price he can afford.
To remove this both hindrance, commerce help us by providing an organised market where the buyers and sellers can easily make connection between them.
It saves the times of both producers and consumers.
2. Hindrance of place:
Hindrance of place is a hindrance related to transferring of good from one place to another place.
Major problem faced by producers is when goods are transferred from one place to another. Problems like loss through theft, damage,fire etc. To remove this hindrance, commerce providing the facility of means of transport, packing and insurance.
Means of transport means transfer goods from one place to another, safely and quickly.
and, packing of goods helps to preserve the quality of goods.
3. Hindrance of time:
Goods are produced on a large scale by the producers and usually there is a time gap between the production and consumption of goods. So it is necessary to store the goods until they are not sold.
To solve this problem commerce provide the facility of warehousing and storage. Warehousing provide storage and protective facility. Warehousing protect goods from fire, pests, rain, etc.
4. Hindrance of Finance:
It is difficult to send the finance from one place to another.
So, Banks are made to solve this problem.
Banks provide many facility like bank draft, cheque, online payments, banks collect payments on behalf of their clients etc.
Now a days transfer of goods from one place to another get more easy. Peoples and Businessmen can send money from one place to another in the form of bank-draft, online payments, cheque, etc..., without facing any hindrance of finance.
5. Hindrance of Risk:
5. Hindrance of Risk:
There is a possibility of loss and damage of goods during transportation and storage. Also a risk of theft, fire, etc.
Facility of insurance are made for the removal of risks.
Insurance helps to remove the hindrance of risks by giving protection against uncertain risk. Insurance provide compensate to businessmen for financial loss.
6. Hindrance of knowledge:
Producers finds many difficulty at the time of sell his goods and services because consumers are not aware of its benefits and its uses.
To remove this hindrance producers are required to do advertising and sale promotion. Advertising of a products helps the consumers to know about the products.
Scope of commerce:
Scope of commerce implies the coverage of the commerce.
Scope of commerce implies the coverage of the commerce.
Today, Scope of commerce has become very wide. Many technical, industrial, and scientific developments are taking place. More and more opportunity of employments are getting increase.
Scope of commerce includes the role played by banks and insurance companies, trade and aids to trade, transport and advertising agencies.
Scope of commerce includes the roles played by the following:
1. Trade
2. Aids to trade
3. Marketing services
4. Documents of trade
5. Commercial office
6. Commercial organisation
7. Good and Services
1. Trade:
First main scope of commerce includes trade.
Trade means buying and selling of goods. Trade are of two types : Home trade and international trade
Home Trade means trade within the boundary of a countries. It can be at local level, state level or national level.
International Trade means foreign trade. Buying and selling between two or more countries.
2. Aids to trade:
Aids to trade also plays a significant role in the scope of commerce.
Those activities, which directly or indirectly facilitate smooth exchange of goods and services. Aids to trade include Banking, Transport, Communication, Insurance, Advertising, Salesmanship, trade promotion, Warehousing, etc.
3. Marketing services:
Scope of commerce also include marketing services.
Marketing services are those methods which are used for smooth flow of goods like packing, warehousing, etc.
4. Documents of trade:
Various important documents that are used in home as well as in foreign trade.
The significant documents that are used in home trade are:
1. Cheque
2. Bill of exchange
3. Promissory notes
4. Railway receipts
5. Warehousing receipts, etc.
The important documents that are used in foreign trade are:
1. Bills of lading
2. Letters of credit
3. Documentary bills of exchange, etc.
5. Commercial office:
Scope of commerce also include commercial office.
Commercial office is the backbone of business.
Commercial office - where execution of business activity is conducted.
According to prof. Dicksee,
"The office is to a business, what the mainspring is to a watch."
6. Commercial organisations:
Activity in business are conducted by various commercial organisations.
Scope of commerce includes various forms of organisations, such as:
1. Sole proprietary organisations
2. Partnership firms
3. Joint stock companies
4. Co-operative societies and
5. Public sector like government companies.
7. Goods and services:
Commerce deals with exchange of goods and services.
Goods include tangible assets such as mobile, laptop, car etc.
Services are intangible such as insurance, airlines, hospitals, hotels, banks , etc.
Buying and selling of goods and services come under the scope of commerce.
No comments