Commerce: Meaning Of Commerce, Functions And Characteristics Of Commerce

Table Of Contents

  • Introduction To Commerce
  • Meaning Of Commerce
  • Functions Of Commerce
  • Characteristics Of Commerce

What Is Commerce
Commerce is defined as all the activities involved in the distribution and exchange of goods and services. It is also a branch of production which concerned with the distribution, exchange of goods and services and all activities which assist or facilitate trade E.g banking, insurance, transportation, communication, tourism etc. It is the process of buying, selling and distributing goods and services. Commerce also developed as a result of specialization.
Functions Of Commerce
Commerce has many functions, these include:
1. Exchange Of Goods And Services: Facilities exchange of goods and services for the benefits of people all over the world through commerce. Country can transact business with one another E.g Nigeria transact (business) with another countries.
2. Risk Bearing: Commerce makes for the protection against risks in the day to day business operation through insurance policies on goods.
3. Increase In Standard Of Living: The extent of commercial activities determines the wealth and standard of living of a country. Under developed countries can obtain automobiles, electronics, computers etc from advanced countries which enhance their living standard.
4. Employment Opportunities: Commerce is a branch of occupations which offers employment opportunities to a large number of people E:g retailer, wholesalers, banker, transporter, importers, advertisers etc.
5. Promotes Rapid Transfer Of Information: Commerce helps in transfer of both oral and written messages through communication.
6. Financing Of Trade And Other Activities: It helps people to have money to do daily purchases and capital for embarking on industrial activities and for financial settlement of transaction both locally and international.
7. Developmental Function: It helps to develop a country economically and technologically. That is the exchange of goods and ideas may help to develop a country economically.
8. Warehousing: It affords the customers the opportunity of getting goods when they are needed and to ensure their steady supply. This is possible by keeping goods in the warehouse.
Characteristics Of Commerce
Here are the characteristics of commerce:
1. Economic Activity: Commerce is an economic activity. A trader buys and sells goods to earn profit and wealth. It is expressed in monetary term.
2. Profits: The motive of commerce is to earn profit. Gift of goods to friend is not commerce, Profit drives the engine of commerce.
3. Marketing: Commerce involves marketing. It involves exchange, distribution and promotion of products. It is done on a regular basis. Marketing is done to create and satisfy customers.
4. Components Of Business: Commerce is a component of business, it deals in goods produced by industry. Industry produce & commerce dispose goods.
5. Utility: Commerce creates place and time utilities to satisfy customer needs. It transport goods from one place of production to place of consumption to create place utility.