Commerce

Commerce includes two types of activities — (i) trade and (ii) auxiliaries to trade.

• Trade is the buying and selling of goods.
• Auxiliaries to trade are the services that make buying and selling possible — transport, banking, insurance, communication, advertisement, packaging and warehousing.

So commerce covers both trade and its auxiliaries. It provides the essential link between producers and consumers and includes all activities needed to maintain a free flow of goods and services.

Removing the hindrances in exchange

Commerce is really about removing the obstacles that stand between producers and consumers:

• Hindrance of persons — removed by trade, which passes goods from the ownership of producers to consumers.
• Hindrance of place — removed by transport, moving goods from the place of production to the markets.
• Hindrance of time — removed by storage and warehousing, holding stocks so goods are sold as and when required.
• Hindrance of risk — goods in stock or in transit face loss or damage from theft, fire or accidents; insurance protects against this.
• Hindrance of finance — the capital needed for these activities is provided by banking and financing institutions. …