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Commerce is an organized system involving the large-scale distribution and transfer of goods and services through various channels between producers and consumers. It comprises trade, including domestic retail and wholesale, as well as international trade involving imports and exports. Auxiliary services such as banking, transportation, and advertising support trade by removing barriers. Commerce is shaped by laws, trade agreements, and market dynamics, driving economic growth, job creation, and global cultural exchange. Modern commerce is increasingly technology-driven with a focus on sustainable and ethical practices under complex regulations.

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Etymology

The English-language word commerce has been derived from the Latin word commercium, from com ("together") and merx ("merchandise").10

Relation to business and trade

Despite many similarities (to the extent that they are sometimes used as synonyms in layman's terms and in other contexts), commerce, business and trade are distinct concepts.

Commerce and business

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.111213

In a general sense, business is the activity of earning money and making one's living through engaging in commerce.14 The difference between business and commerce is that business can also refer to a commercial entity, such as a company.15 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.16

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 and trade

Commerce is distinguishable from trade as well. 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 or domestic trade, which can be wholesale or retail. 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 or international trade, which consists of import trade and export trade, both being wholesale in general.

Commerce not only includes trade as defined above, but also the auxiliary services or aids to trade17 and means that facilitate such trade. Auxiliary services aid trade by providing services which such as transportation, communication, warehousing, insurance, banking, credit financing to companies, advertising, packaging, and the services of commercial agents and agencies. In other words, commerce encompasses a wide array of political, economical, technological, logistical, legal, regulatory, social and cultural aspects of trade on a large scale. From a marketing 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.

History

Historian Peter Watson and Ramesh Manickam date the history of long-distance commerce from circa 150,000 years ago.18 In historic times, the introduction of currency as a standardized money facilitated the exchange of goods and services.19

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.20 Markets became a feature of town life, and were regulated by town authorities.21 With the advent of the Age 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-based electronic commerce (where financial information is transferred over Internet), and its subcategories such as wireless mobile commerce and social network-based social commerce have been and continue to get adopted widely.

Regulation

Main article: Commercial law

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 the GATT and later the World Trade Organization became the principal systems regulating global commerce. The International Chamber of Commerce (ICC) is another important organization which sets rules and resolves disputes in international commerce.

Where national government 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.

See also

Look up commerce in Wiktionary, the free dictionary.

References

  1. "Commerce". Oxford English Dictionary (Online ed.). Oxford University Press. (Subscription or participating institution membership required.) https://www.oed.com/view/Entry/37073 ↩

  2. James Stephenson (1942), Principles and Practice of Commerce, London: Sir Issac Pitman & Sons, Ltd, p. 95 ↩

  3. "Commerce Definition & Meaning | Britannica Dictionary". www.britannica.com. Retrieved 2024-12-03. commerce: activities that relate to the buying and selling of goods and services https://www.britannica.com/dictionary/commerce ↩

  4. "COMMERCE". Collins Dictionary. Commerce is the activities and procedures involved in buying and selling things. https://www.collinsdictionary.com/dictionary/english/commerce ↩

  5. Jonathan Law, ed. (2016), A Dictionary of Business and Management (6th ed.), Oxofrd University Press, p. 26 ↩

  6. James Stephenson (1942), Principles and Practice of Commerce, London: Sir Issac Pitman & Sons, Ltd, p. 14 ↩

  7. Jonathan Law, ed. (2016), A Dictionary of Business and Management (6th ed.), Oxofrd University Press, p. 26 ↩

  8. IMF Staff (November 2001). "Global Trade Liberalization and the Developing Countries". International Monetary Fund. https://www.imf.org/external/np/exr/ib/2001/110801.htm ↩

  9. Bas Hooijmaaijers (2021), "China, the BRICS, and the limitations of reshaping global economic governance", The Pacific Review, 34 (1): 29–55, doi:10.1080/09512748.2019.1649298 /wiki/Doi_(identifier) ↩

  10. Chisholm, Hugh, ed. (1911). "Commerce" . Encyclopædia Britannica. Vol. 6 (11th ed.). Cambridge University Press. pp. 766–770. /wiki/Hugh_Chisholm ↩

  11. "COMMERCE". Cambridge Dictionary. commerce : the activities involved in buying and selling things https://dictionary.cambridge.org/dictionary/english/commerce ↩

  12. Jonathan Law, ed. (2016), A Dictionary of Business and Management (6th ed.), Oxofrd University Press, p. 26 ↩

  13. Mary Trigwell-Jones (2016), Cambridge O Level Commerce Coursebook, Cambridge University Press, p. 19 ↩

  14. Oxford Living Dictionaries. Archived from the original on May 1, 2019. business [:] 2 The practice of making one's living by engaging in commerce. https://web.archive.org/web/20190501064740/https://en.oxforddictionaries.com/definition/us/business ↩

  15. "business". Cambridge Dictionary. business : a particular company that buys and sells goods and services https://dictionary.cambridge.org/dictionary/english/business ↩

  16. "Introduction to Business". Understanding Economic Systems and Business. Openstax - Rice University. 2018. p. 12. https://openstax.org/books/introduction-business/pages/1-1-the-nature-of-business ↩

  17. Jonathan Law, ed. (2016), A Dictionary of Business and Management (6th ed.), Oxofrd University Press, p. 26 ↩

  18. Watson, Peter (2005). Ideas : A History of Thought and Invention from Fire to Freud. HarperCollins. ISBN 0-06-621064-X. Introduction. 0-06-621064-X ↩

  19. Davies, Glyn (2002). Ideas: A history of money from ancient times to the present day. University of Wales Press. ISBN 0-7083-1717-0. 0-7083-1717-0 ↩

  20. Martha C. Howell (12 April 2010). Commerce Before Capitalism in Europe, 1300-1600. Cambridge University Press. ISBN 978-0-521-76046-1. 978-0-521-76046-1 ↩

  21. Fernand Braudel (1982). Civilization and Capitalism, 15th-18th Century: The wheels of commerce. University of California Press. p. 30. ISBN 978-0-520-08115-4. Taken over by towns, the markets grew apace with them. 978-0-520-08115-4 ↩