Commerce is the organizedsystem of activities, functions, procedures and institutions that directly or indirectly contribute to the smooth, unhindered exchange ofgoods, services, and other things ofvalue—predominantly throughtransactional processes—at the right time, place, quantity,quality andprice through variouschannels among the originalproducers and the finalconsumers within local, regional, national or international economies.[1][2][3][4][5] The diversity in the distribution ofnatural resources, differences of humanneeds andwants, anddivision of labour along withcomparative advantage are the principal factors that give rise to commercial exchanges.[6]
Commerce consists oftrade and aids to trade[5] (i.e. auxiliary commercial services) taking place along the entiresupply chain. Trade is the exchange of goods (includingraw materials,intermediate andfinished goods) and services betweenbuyers andsellers in return for anagreed-upon price at traditional (oronline)marketplaces. It is categorized intodomestic trade, includingretail andwholesale as well as local, regional, inter-regional andinternational/foreign trade (encompassingimport,export andentrepôt/re-export trades). The exchange ofcurrencies (inforeign exchange markets),commodities (incommodity markets/exchanges) andsecurities andderivatives (instock exchanges andfinancial markets) in specializedexchange markets, typically operating under the domain offinance andinvestment, also falls under the umbrella of trade. On the other hand, auxiliary commercial activities (aids to trade) which can facilitate trade include commercialintermediaries,banking, credit financing and related services,transportation,packaging,warehousing,communication,advertising andinsurance. Their purpose is to remove hindrances related to direct personal contact,payments,savings,funding, separation of place and time, product protection and preservation,knowledge andrisk.
The broader framework of commerce incorporates additional elements and factors such aslaws and regulations (includingintellectual property rights andantitrust laws),policies,tariffs andtrade barriers,consumers andconsumer trends,producers and production strategies, supply chains and theirmanagement,financial transactions for ordinary and extraordinary business activities,market dynamics (includingsupply and demand),technological innovation,competition andentrepreneurship,trade agreements,multinational corporations andsmall and medium-sized enterprises (SMEs), andmacroeconomic factors (likeeconomic stability).
Commerce driveseconomic growth,development andprosperity, promotes regional and internationalinterdependence, fosterscultural exchange,creates jobs, improves people'sstandard of living by giving them access to a wider variety of goods and services, and encouragesinnovation and competition for betterproducts. On the other hand, commerce can worseneconomic inequality byconcentrating wealth (andpower) into the hands ofa small number of individuals, and by prioritizing short-termprofit over long-term sustainability andethical,social, and environmental considerations, leading toenvironmental degradation,labor exploitation and disregard forconsumer safety. Unregulated, it can lead toexcessive consumption (generatingundesirable waste) andunsustainable exploitation of nature (causingresource depletion). Harnessing commerce'sbenefits for the society while mitigating itsdrawbacks remains vital forpolicymakers,businesses and otherstakeholders, who are increasingly adoptingsustainable practices,ethical sourcing, andcircular economy models,
Commerce traces its origins to ancient localizedbarter systems, leading to the establishment of periodic marketplaces, and culminating in the development ofcurrencies forefficient trade. In medieval times,trade routes (like theSilk Road) with pivotal commercial hubs (likeVenice) connected regions and continents, enabling long-distance trade andcultural exchange. From the 15th to the early 20th century,European colonial powers dominated global commerce on an unprecedented scale, giving rise to maritime trade empires with their powerful colonial trade companies (e.g.,Dutch East India Company andBritish East India Company) and ushering in an unprecedented global exchange (seeColumbian exchange). In the 19th century,modern banking and related international markets along with theIndustrial Revolution fundamentally reshaped commerce. In thepost-colonial 20th century,free market principles gained ground,multinational corporations andconsumer economies thrived in U.S.-ledcapitalist countries andfree trade agreements (likeGATT andWTO) emerged, whereascommunist economies encounteredtrade restrictions, limitingconsumer choice. Furthermore, in the mid-20th century, the adoption ofstandardized shipping containers facilitated seamless and efficientintermodal freight transport, leading to a surge in international trade. By the century's end,developing countries saw their share in world trade rise from a quarter to a third.[7] 21st century commerce is increasinglytechnology-driven (seee-commerce,role of artificial intelligence andautomation),globalized, intricatelyregulated,ethically responsible andsustainability-focused (e.g.,climate-resilient trade practices), withmultilateraleconomic integrations (like theEuropean Union) or coalitions (likeBRICS),[8]gig economy and platform-baseduberisation of services,geopolitical shifts andtrade wars leading to its reconfiguration.
The English-language wordcommerce has been derived from theLatin wordcommercium, fromcom ('together') andmerx ('merchandise').[9]
 | This sectionneeds additional citations forverification. Please helpimprove this article byadding citations to reliable sources in this section. Unsourced material may be challenged and removed.(February 2024) (Learn how and when to remove this message) |
Despite many similarities (to the extent that they are sometimes used as synonyms in layman's terms and in other contexts), commerce,business andtrade are distinct concepts.
Commerce deals with buying, selling, and distribution of goods and services from producers to customers as well as related matters such as marketing, finance, laws, transportation, and insurance.[10][5][11]
In a general sense, business is the activity of earning money and making one's living through engaging in commerce.[12] The difference between business and commerce is that business can also refer to acommercial entity, such as a company.[13] So, in a more specific sense, a business is an organization or activity for making a profit by providing goods and services which meet the needs of its customers or consumers.[14]
Viewed in this way, commerce is a broader concept and an overall, all-encompassing aspect of business. Commerce provides the underlying large-scale transactional environment comprising all kinds of exchanges within which individual business organizations operate for generating profits.
Commerce is also distinguishable fromtrade. Trade is the transaction (buying and selling) of goods and services that makes a profit for the seller and satisfies the want or need of the buyer. When trade is carried out within a country, it is called home ordomestic trade, which can bewholesale orretail. A wholesaler buys from the producer in bulk and sells to the retailer who then sells again to the final consumer in smaller quantities. Trade between a country and the rest of the world is called foreign orinternational trade, which consists ofimport trade andexport trade, both being wholesale in general.
Commerce comprises not only trade, as defined above, but also auxiliary services, or aids to trade,[5] and various procedures designed to facilitate trade. Auxiliary services such astransportation,communication,warehousing,insurance,banking services including access to credit and important financial systems, ancillary activities such as funding technological research, andpackaging and making use of services offered by commercial agents such as law firms and property brokerages. In other words, commerce describes the wide, dynamic range of political, economic, technological, logistical, legal, regulatory, social, and cultural aspects of trade in abstract terms, rather than as an assemblage of particular enterprises and actors.
From amarketing perspective, commerce creates time and place utility by making goods and services available to the customers at the right place and at the right time by changing their location or placement. Described in this manner, trade is a part of commerce and commerce is an aspect of business.
HistorianPeter Watson and Ramesh Manickam date thehistory of long-distance commerce from circa 150,000 years ago.[16] In historic times, the introduction ofcurrency as a standardizedmoney facilitated the exchange of goods and services.[17]
Commerce was a costly endeavor in the antiquities because of the risky nature of transportation, which restricted it to local markets. Commerce then expanded along with the improvement of transportation systems over time. In the Middle Ages, long-distance and large-scale commerce was still limited within continents.Banking systems developed in medieval Europe, facilitating financial transactions across national boundaries.[18]Markets became a feature of town life, and were regulated by town authorities.[19] With the advent of theAge of Discovery and oceangoing ships, commerce took an international, trans-continental stature.
Currently the reliability of international trans-oceanic shipping and mailing systems and the facility of the Internet has made commerce possible between cities, regions and countries situated anywhere in the world. In the 21st century, Internet-basedelectronic commerce (where financial information is transferred over Internet), and its subcategories such as wirelessmobile commerce andsocial network-basedsocial commerce have been and continue to get adopted widely.
Legislative bodies and ministries or ministerial departments of commerce regulate, promote and manage domestic and foreign commercial activities within a country. International commerce can be regulated by bilateral treaties between countries. After the second world war and the rise of free trade among nations, multilateral arrangements such as theGATT and later theWorld Trade Organization became the principal systems regulating global commerce. TheInternational Chamber of Commerce (ICC) is another important organization which sets rules and resolves disputes in international commerce.
Where nationalgovernment bodies undertake commercial activity with or inside other states, this commercial activity may fall outside the protection of the international rules which govern legal relationships between independent states: see, for example, the "commercial activity exception" applicable under the United States'Foreign Sovereign Immunities Act of 1976.
commerce: activities that relate to the buying and selling of goods and services
Commerce is the activities and procedures involved in buying and selling things.
commerce : the activities involved in buying and selling things
business [:] 2 The practice of making one's living by engaging in commerce.
business : a particular company that buys and sells goods and services
Taken over by towns, the markets grew apace with them.
| National | |
|---|---|
| Other | |
