Everything about Business Management totally explained
Commerce is a division of trade or production which deals with the exchange of goods and services from producer to final consumer. It comprises the
trading of something of
economic value such as
goods,
services,
information or
money between two or more entities. Commerce functions as the central mechanism which drives
capitalism and certain other
economic systems (but compare
command economy, for example).
Commercialization or
commercialisation consists of the process of transforming something into a product, service or activity which one may then use in commerce.
Word usage
Commerce primarily expresses the fairly abstract notions of
buying and
selling, whereas
trade may refer to the exchange of a specific class of goods ("the sugar trade", for example), or to a specific act of exchange (as in "a trade on the stock-exchange").
Business can refer to an organization set up for the purpose of engaging in manufacturing or exchange, as well as serving as a loose synonym of the abstract collective "commerce and industry". Compare with
retailing.
History
Some commentators trace the origins of commerce to the very start of
communication in prehistoric times. Apart from traditional
self-sufficiency,
trading became a principal facility of prehistoric people, who
bartered what they'd for goods and services from each other. Historian
Peter Watson dates the
history of long-distance commerce from
circa 150,000 years ago.
In historic times, the introduction of
currency as a standardized
money facilitated a wider exchange of goods and services.
Numismatists have collections of these monies, which include
coins from some Ancient World large-scale societies, although initial usage involved unmarked lumps of
precious metal.
The circulation of a standardized currency provides the major advantage to commerce of overcoming the "
double coincidence of wants" necessary for
barter trades to occur. For example, if a man who makes pots for a living needs a new house, he may wish to hire someone to build it for him. But he can't make an equivalent number of pots to equal this service done for him, because even if the builder could build the house, the builder might not want the pots. Currency solved this problem by allowing a society as a whole to assign values and thus to collect goods and services effectively and to store them for later use, or to split them among several providers.
Today commerce includes a complex system of
companies that try to maximize their profits by offering
products and
services to the
market (which consists both of individuals and other companies) at the lowest
production-cost. There exists a system of world-wide or
foreign commerce, which some argue has gone too far (
see main:
Free trade).
Further Information
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