Trade, Commerce and Business

Trade, Commerce and Business

Trade

The activity of buying and selling is called trade. Trade occurred when the people started to exchange their excess production (beginning of barter system. this was just a start and it developed as domestic trade and international trade.

Functions of trade

Buying; obtaining the ownership of the product by making a payment

Selling; giving up the ownership of the product by obtaining the value of the product

Commerce

In order to trade effectively, various help from supportive services are required. These supportive services are called Auxiliary services. Auxiliary services are the services providing aids to undertake trading activities effectively. The following services are considered as the main types of auxiliary services

• ·         Money and Banking
• ·         Transportation
• ·         Warehousing
• ·         Communication
• ·         Insurance
• ·         Consultancy services

When auxiliary services are combined with trade, the combination is called commerce. (Doing trade effectively with the auxiliary services is called commerce.) Therefore commerce is wider than trade.

Business

Business is any activity that satisfies human needs and wants. In other words, business is a set of functions that are undertaken in order to satisfy human needs and wants.

 Therefore, business includes the following parts

·         Industries

·         Auxiliary services

Trade