Commerce

Commerce is a process of exchanging goods and services. It includes all the activities which are directly or indirectly involves the exchanges. Commerce is a branch of business.
Commerce includes the distribution process of the products from manufactures to the consumers.

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2. What is Commerce..??
Commerce is a process of exchanging goods and services. It includes all the
activities which are directly or indirectly involves the exchanges. Commerce is a
branch of business.
Commerce includes the distribution process of the products from manufactures to
the consumers.
According to James Stephenson, “Commerce is an organized system for the
exchange of goods between the members of the industrial world.”

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3. TYPES OF COMMERCE

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4. 1- Business-to-Business (B2B)
Business to Business commerce means, there a business provides their
services or products to other business. Business does not provide services
or products directly to consumers. they supply their raw material to another
business, and they build the products and then sell to the consumers

Example: Intel makes microchip for Dell, Samsung makes Apple mobile
display


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5. 2- Business-to-Consumer (B2C)
Business to Consumers e-commerce process means when Business sells its
products and services to the consumers directly. it is the most
preferred method of e-commerce. B2C is a traditional method of
commerce, But e-commerce is on the internet.

Examples: Newegg.com, Overstock.com, Amazon.com

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6. 3- Consumer-to-Consumer (C2C)
Consumer to Consumer means when consumer sells their products or
services directly to another consumer. it is the best platform for those
consumers who want to get used products.
Consumer to business means when consumers sell their products or
services to the business. it is best-preferred method when the company
needs to get feedback of the people.

Example: Olx.com, Quicker.com

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8. It is the sum total of those processes which are engaged in the
removal of hindrances of persons (trade), place (trans­port, packing
and insurance), and time (warehousing) in the exchange (banking
and finance) of commodities.”

Thus the main function of commerce is to remove the following
hindrances:

1. Hindrance of person:
This hindrance refers to the lack of contact between producers and
consumers. The producer is faced with the problem of finding the
buyers who need the goods he has produced and who are able and
willing to buy such goods.
Trade provides an organised market where the buyers and sellers can
contact each other. It saves both producers and consumers from the
time-consum­ing and expensive exercise of locating each other.

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9. 2. Hindrance of place:
A major problem faced by producers is to send their goods to distant places
without loss through theft, pilferage, damage, etc. Commerce solves this
problem by means of transport, packing and insurance.
Modern means of transport carry goods too far-of places quickly and
safely. Packing of goods helps to preserve their quality in transit and
storage. With the help of packing, businessman can preserve the quality of
goods. Thus, transportation and packing are useful commercial activities.
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10. 3. Hindrance of time:
In modern industry goods are produced on a large-scale in anticipa­tion of
demand. There is usually a time gap between the production and
consumption of goods. Therefore, it becomes necessary to store the goods
until they are sold.
This problem is solved by warehousing or storage. Warehouses provide
suitable storage facilities to protect the goods from fire, rain, pests, etc.
Warehousing is, thus, an integral part of commerce.

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11. 4. Hindrance of exchange:
Buying and selling of goods between persons living in different places
requires a common medium of payment. Money serves as common
medium of payment. However, convenient, and safe means of payment are
required to settle the transaction.
Banks help to remove this obstacle in the process of exchange by making
and collecting payments on behalf of their clients.
Now businessmen can send money from one place to another in the form of
bank-draft, cheque, etc., without facing any risk. Banks also provide credit
in the form of over­drafts, letter of credit, cash credit, discounting of bills,
etc.
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12. 5. Hindrance of Risk:
During transportation and storage, there are several possibilities of loss or
damage of goods. There also exist risks of theft, burglary deterioration,
fire, etc.
These risks cause anxiety among businessmen and discourage them from
investing money in business. Insur­ance helps to remove the hindrance of
risks by compensating businessmen for financial loss. It plays a vital role in
the development of trade and commerce.

Uninsured Goods Insured Goods
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13. 6. Hindrance of knowledge:
Often a producer or merchant finds it difficult to sell his goods and services
because consumers are not aware of their benefits and uses.
Advertising and sale promotion remove this hindrance by bringing goods
and services to the knowledge of consumers. Advertising also persuades
people to buy the goods and services.
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14. Conclusion:-
•Thus, commerce plays an important role in the distribution of goods. It
makes available to the users goods produced in different parts of a country
as well as from other countries.
•People are able to buy goods produced anywhere in the world. The
producers are relieved of the problem of marketing the goods and can
concentrate on increasing production Commercial activities break the
barrier between producers and consumers.
•Commerce ensures a free and smooth flow of goods from producers to
consumers. Commerce provides the advantages of specialisation. It helps to
better satisfy human wants by collecting and distributing goods.
•Commerce provides the neces­sary link between the producers and
consumers of goods. It has brought countries close to one another and the
world has become one big market.
•Large scale production is impossible without modern commerce.
•The basic aim of commerce is to ensure the supply of right goods at the
right time at the right place and to right persons. Commerce brings goods
to the hands of ultimate consumer.

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