Commerce - nature

• All activities of various agencies which ensure a free flow of goods and services between the producers and consumers

• A link between producer and consumer• Activities that are required for bringing goods to the

hands of the ultimate consumers• Ensure the supply of goods at the right place, in proper

quantities and at the time when they are demanded• Removes all obstacles in the exchange process

Commerce Function Remove the following hindrances:• Hindrance of person• Hindrance of place• Hindrance of time• Hindrance of exchange• Hindrance of risk• Hindrance of knowledge

Importance • Satisfy increasing human wants• Improve standard of living• Links producers and consumers• Generates employment

opportunities• Increases national income and

wealth• Helps in expansion of aids to trade• Growth of industrial development• Encourages international trade• Benefits underdeveloped countries

Business Activities

• Industrial activities [production of goods]• Commercial activities [distribution of goods

and rendering of services]

Industrial activities

• Genetic industry• Extractive industry• Manufacturing industry• Construction industry

Commercial activities

Trade • Home trade

– Wholesale trade– Retail trade

• Foreign trade– Export– Import– Entrepot

Aids to trade• Transportation• Warehousing• Banking• Insurance• Advertising and publicity• Communication

Industrial activities

On the basis of size and investment

• Micro• Small• Medium• Large

On the basis of activity • Primary sector• Secondary sector• Tertiary sector

Interrelationship between commerce, trade and industry

• Between industry and commerce• Between commerce and trade• Interrelationship between commerce, trade

and industry

Business Objectives

• Economic • Human• Social• National

Economic • Profit earning motive• Optimum use of resources• Creation of demand• Goodwill and recognition of

business• Production of tangible

forms of wealth

Social • Provision of employment• Supply of quality goods at

reasonable prices• Assistance for social

development• Rehabilitating displaced persons• Protection of the environment• Payment of dues to government• Avoiding anti-social activities

Human Objectives• Fair treatment of workers• Fair treatment of customers• Fair treatment of suppliers

and creditors• Fair treatment of investors

National Objectives• Balanced regional growth• National prosperity and

economic growth• Growth of small business• Producing goods according

to national priorities• Economic self-reliance• Development of skilled

personnel