Commerce refers to all the activities that take place in the distribution and exchange of goods and services.

Commerce connects the producer to the final consumer by making goods available at the right place and at the right time.

Commerce includes both trade and aids to trade.

Commerce is divided into two major parts:

• Trade


• Aids to trade

TRADE

Trade refers to the buying and selling of goods and services.

Trade is divided into:

A. Home Trade

This refers to trade carried out within a country.

It has two branches:

1. Wholesale Trade


2. Retail Trade


B. Foreign Trade

This refers to trade carried out between different countries.

It has three branches:

1. Import Trade – buying goods from another country


2. Export Trade – selling goods to another country


3. Entrepôt Trade – importing goods and re-exporting them



AIDS TO TRADE

Aids to trade refer to services that make trade easy and faster. They support movement, financing, storage, promotion, and communication of goods.

The aids to trade are:

a. Transportation

The movement of goods and people. Examples: road, rail, air, water, pipeline.

b. Banking

Banks provide services such as saving money, lending money, advice, and safe keeping.

c. Insurance

Insurance provides protection against loss, damage, or accidents.

d. Communication

The process of sending and receiving information.

e. Warehousing

The storage of goods until they are needed.

f. Advertising

Advertising informs, persuades, and reminds consumers about goods.

1. Commerce helps to improve the movement of goods.


2. Commerce provides employment opportunities.


3. Commerce helps to improve the standard of living.


4. Commerce promotes international relationships.


5. Commerce supports industrial development.


6. Commerce improves business security through insurance.


7. Commerce improves communication between buyers and sellers.

A wholesaler buys in large quantities and sells in smaller quantities.

Functions of Wholesalers:

1. They help producers by buying in bulk.


2. They help retailers by selling smaller units.


3. They help to improve storage of goods.


4. They help to improve transportation.


5. They help to improve finance by giving credit.


6. They provide market information.

A retailer sells goods in small quantities to consumers.

Types of Retailers:

1. Hawkers and pedlars


2. Roadside sellers


3. Market traders


4. Kiosk owners


5. Supermarkets


6. Departmental stores


7. Chain stores


8. Mail order businesses

Functions of Retailers:

1. They sell goods in small units.


2. They give credit to customers.


3. They display goods.


4. They provide after-sales service.


5. They give information to consumers.


6. They pass consumer feedback to producers.

Foreign trade is the exchange of goods and services across national boundaries.

Types of Foreign Trade:

1. Import


2. Export


3. Entrepôt

Problems of Foreign Trade:

1. Language differences


2. Tariffs and import duties


3. Distance


4. Poor transportation


5. Political problems


6. Exchange rate differences

1. Invoice – shows details of goods sold and the amount due


2. Receipt – proof of payment


3. Quotation – shows cost before buying


4. Order form – used to request goods


5. Delivery note – shows goods have been delivered


6. Debit note – informs buyer of more money owed


7. Credit note – informs buyer of money deducted

Economics deals with managing scarce resources.

Commerce deals with the exchange and distribution of goods and services.

1. Level of technology


2. Government policies


3. Level of income


4. Availability of transport


5. Population size


6. Availability of markets


7. Political stability

1. Banker


2. Accountant


3. Marketer


4. Business manager


5. Customs officer


6. Insurance agent


7. Secretary


8. Entrepreneur


9. Retailer


10. Wholesaler

                            COMMERCE
                                       |
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                    |                                              |
                  TRADE                                      AIDS TO TRADE
                    |                                              |
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        |                         |                  |        |        |            |                |            |
    HOME TRADE             FOREIGN TRADE        TRANSPORT   BANKING   INSURANCE   COMMUNICATION  WAREHOUSING ADVERTISING
        |                         |                                                 
  -----------             -----------------              
  |         |             |       |       |
WHOLESALE RETAIL         IMPORT EXPORT ENTREPOT