TOPIC ONE

1. SCOPE OF COMMERCE
1.1 Definition of commerce
Commerce is a branch of
business. It is concerned with
the exchange of goods and
services. It
includes all those activities,
which directly or indirectly
facilitate that exchange.
Nearly every business
transaction is a form of
commerce: purchasing food at a
restaurant, buying
goods and selling goods in a
store, drilling for oil, etc.
Importance of Commerce
The importance of commerce
are mentioned in following
points:-
TOPIC ONE
1. SCOPE OF COMMERCE
1.1 Definition of commerce
Commerce is a branch of
business. It is concerned with
the exchange of goods and
services. It
includes all those activities,
which directly or indirectly
facilitate that exchange.
Nearly every business
transaction is a form of
commerce: purchasing food at a
restaurant, buying
goods and selling goods in a
store, drilling for oil, etc.
Importance of Commerce
The importance of commerce
are mentioned in following
points:-
TOPIC ONE
1. SCOPE OF COMMERCE
1.1 Definition of commerce
Commerce is a branch of
business. It is concerned with
the exchange of goods and
services. It
includes all those activities,
which directly or indirectly
facilitate that exchange.
Nearly every business
transaction is a form of
commerce: purchasing food at a
restaurant, buying
goods and selling goods in a
store, drilling for oil, etc.
Importance of Commerce
The importance of commerce
are mentioned in following
points:-
TOPIC ONE
1. SCOPE OF COMMERCE
1.1 Definition of commerce
Commerce is a branch of
business. It is concerned with
the exchange of goods and
services. It
includes all those activities,
which directly or indirectly
facilitate that exchange.
Nearly every business
transaction is a form of
commerce: purchasing food at a
restaurant, buying
goods and selling goods in a
store, drilling for oil, etc.
Importance of Commerce
The importance of commerce
are mentioned in following
points:-
TOPIC ONE
1. SCOPE OF COMMERCE
1.1 Definition of commerce
Commerce is a branch of
business. It is concerned with
the exchange of goods and
services. It
includes all those activities,
which directly or indirectly
facilitate that exchange.
Nearly every business
transaction is a form of
commerce: purchasing food at a
restaurant, buying
goods and selling goods in a
store, drilling for oil, etc.
Importance of Commerce
The importance of commerce
are mentioned in following
points:-
TOPIC ONE
1. SCOPE OF COMMERCE
1.1 Definition of commerce
Commerce is a branch of
business. It is concerned with
the exchange of goods and
services. It
includes all those activities,
which directly or indirectly
facilitate that exchange.
Nearly every business
transaction is a form of
commerce: purchasing food at a
restaurant, buying
goods and selling goods in a
store, drilling for oil, etc.
Importance of Commerce
The importance of commerce
are mentioned in following
points:-
1. Commerce tries to satisfy
increasing human wants
Human wants are never ending.
They can be classified as 'Basic
wants' and 'Secondary wants'.
Commerce has made
distribution and movement of
goods possible from one part of
the world to
the other. Today we can buy
anything produced anywhere in
the world. This has in turn
enabled
man to satisfy his innumerable
wants and thereby promoting
social welfare.
2. Commerce helps to increase
our standard of living
Standard of living refers to
quality of life enjoyed by the
members of a society. When
man con-
sumes more products his
standard of living improves. To
consume a variety of goods he
must be
able to secure them first.
Commerce helps us to get what
we want at right time, right
place and at
right price and thus helps in
improving our standard of
living.
3. Commerce links producers
and consumers
Production is meant for ultimate
consumption. Commerce makes
possible to link producers and
consumers through retailers and
wholesalers and also through
the aids to trade. Consumers get
information about different
goods through advertisements
and salesmanship. The
manufacturers
are regularly informed about the
likes and dislikes of the
consumers through marketing
research.
Thus commerce creates contact
between the centers of
production and consumption
and links
them.
4. Commerce generates
employment opportunities
The growth of commerce,
industry and trade bring about
the growth of agencies of trade
such as
banking, transport,
warehousing, advertising, etc.
These agencies need people to
look after their
functioning. Increase in
production results in increasing
demand, which further results in
boost-
ing employment opportunities.
Thus development of commerce
generates more and more em-
ployment opportunities for
millions of people in a country.
5. Commerce increases national
income and wealth
When production increases,
national income also increases.
In a developed country,
manufactur-
ing industries and commerce
together accounts for nearly
80% of total national income. It
also
helps to earn foreign exchange
by way of exports and duties
levied on imports. Thus,
commerce
increases the national income
and wealth of a nation.
1
6. Commerce helps in
expansion of aids to trade
With the growth in trade and
commerce there is growing
need for expansion and
modernization
of aids to trade. Aids to trade
such as banking,
communication, advertising and
publicity, trans-
port, insurance, etc., are
expanded and modernised for
the smooth conduct of
commerce.
7. Commerce helps in growth of
industrial development
Commerce looks after the
smooth distribution of goods
and services made available by
the in-
dustry. Without commerce,
industry will find it difficult to
keep the pace of production. It
helps
to increase demand for goods
on one hand and on the other
hand it helps industries by
getting
them the necessary raw
materials and other services.
Hence, commerce helps in
attaining better
division of labour and industrial
progress.
8. Commerce encourages
international trade
Through commerce we can
secure a fair and equitable
distribution of goods
throughout the
world. With the help of
transport and communication
development, countries can
exchange their
surplus commodities and earn
foreign exchange, which is very
useful for importing mach
TOPIC ONE
1. SCOPE OF COMMERCE
1.1 Definition of commerce
Commerce is a branch of
business. It is concerned with
the exchange of goods and
services. It
includes all those activities,
which directly or indirectly
facilitate that exchange.
Nearly every business
transaction is a form of
commerce: purchasing food at a
restaurant, buying
goods and selling goods in a
store, drilling for oil, etc.
Importance of Commerce
The importance of commerce
are mentioned in following
points:-
1. Commerce tries to satisfy
increasing human wants
Human wants are never ending.
They can be classified as 'Basic
wants' and 'Secondary wants'.
Commerce has made
distribution and movement of
goods possible from one part of
the world to
the other. Today we can buy
anything produced anywhere in
the world. This has in turn
enabled
man to satisfy his innumerable
wants and thereby promoting
social welfare.
2. Commerce helps to increase
our standard of living
Standard of living refers to
quality of life enjoyed by the
members of a society. When
man con-
sumes more products his
standard of living improves. To
consume a variety of goods he
must be
able to secure them first.
Commerce helps us to get what
we want at right time, right
place and at
right price and thus helps in
improving our standard of
living.
3. Commerce links producers
and consumers
Production is meant for ultimate
consumption. Commerce makes
possible to link producers and
consumers through retailers and
wholesalers and also through
the aids to trade. Consumers get
information about different
goods through advertisements
and salesmanship. The
manufacturers
are regularly informed about the
likes and dislikes of the
consumers through marketing
research.
Thus commerce creates contact
between the centers of
production and consumption
and links
them.
4. Commerce generates
employment opportunities
The growth of commerce,
industry and trade bring about
the growth of agencies of trade
such as
banking, transport,
warehousing, advertising, etc.
These agencies need people to
look after their
functioning. Increase in
production results in increasing
demand, which further results in
boost-
ing employment opportunities.
Thus development of commerce
generates more and more em-
ployment opportunities for
millions of people in a country.
5. Commerce increases national
income and wealth
When production increases,
national income also increases.
In a developed country,
manufactur-
ing industries and commerce
together accounts for nearly
80% of total national income. It
also
helps to earn foreign exchange
by way of exports and duties
levied on imports. Thus,
commerce
increases the national income
and wealth of a nation.
1
6. Commerce helps in
expansion of aids to trade
With the growth in trade and
commerce there is growing
need for expansion and
modernization
of aids to trade. Aids to trade
such as banking,
communication, advertising and
publicity, trans-
port, insurance, etc., are
expanded and modernised for
the smooth conduct of
commerce.
7. Commerce helps in growth of
industrial development
Commerce looks after the
smooth distribution of goods
and services made available by
the in-
dustry. Without commerce,
industry will find it difficult to
keep the pace of production. It
helps
to increase demand for goods
on one hand and on the other
hand it helps industries by
getting
them the necessary raw
materials and other services.
Hence, commerce helps in
attaining better
division of labour and industrial
progress.
8. Commerce encourages
international trade
Through commerce we can
secure a fair and equitable
distribution of goods
throughout the
world. With the help of
transport and communication
development, countries can
exchange their
surplus commodities and earn
foreign exchange, which is very
useful for importing mach
TOPIC ONE1. SCOPE OF COMMERCE1.1 Definition of commerce Commerce is a branch
of business. It is concerned with the exchange of goods and services. It includes all those
activities, which directly or indirectly facilitate that exchange. Nearly every business transaction
is a form of commerce: purchasing food at a restaurant, buying goods and selling goods in a
store, drilling for oil, etc. Importance of Commerce The importance of commerce are mentioned
in following points:-
1. Commerce tries to satisfy increasing human wants
Human wants are never ending. They can be classified as 'Basic wants' and 'Secondary
wants’. Commerce has made distribution and movement of goods possible from one part
of the world to the other. Today we can buy anything produced anywhere in the world.
This has in turn enabled man to satisfy his innumerable wants and thereby promoting
social welfare.

2. Commerce helps to increase our standard of living

Standard of living refers to quality of life enjoyed by the members of a society. When
man consumes more products his standard of living improves. To consume a variety of
goods he must be able to secure them first. Commerce helps us to get what we want at
right time, right place and at right price and thus helps in improving our standard of
living.

3. Commerce links producers and consumers

Production is meant for ultimate consumption. Commerce makes possible to link
producers and consumers through retailers and wholesalers and also through the aids to
trade. Consumers get information about different goods through advertisements and
salesmanship. The manufacturers are regularly informed about the likes and dislikes of
the consumers through marketing research. Thus, commerce creates contact between the
centers of production and consumption and links them.

4. Commerce generates employment opportunities

The growth of commerce, industry and trade bring about the growth of agencies of trade
such as banking, transport, warehousing, advertising, etc. These agencies need people to
 look after their functioning. Increase in production results in increasing demand, which
further results in boosting employment opportunities. Thus, development of commerce
generates more and more employment opportunities for millions of people in a country.

5. Commerce increases national income and wealth

When production increases, national income also increases. In a developed country,
manufacturing industries and commerce together accounts for nearly 80% of total
national income. It also helps to earn foreign exchange by way of exports and duties
levied on imports. Thus, commerce increases the national income and wealth of a nation.

6. Commerce helps in expansion of aids to trade

With the growth in trade and commerce there is growing need for expansion and
modernization of aids to trade. Aids to trade such as banking, communication, advertising
and publicity, trans-port, insurance, etc., are expanded and modernized for the smooth
conduct of commerce.

7. Commerce helps in growth of industrial development

Commerce looks after the smooth distribution of goods and services made available by
the industry. Without commerce, industry will find it difficult to keep the pace of
production. It helps to increase demand for goods on one hand and on the other hand it
helps industries by getting them the necessary raw materials and other services. Hence,
commerce helps in attaining better division of labour and industrial progress.

8. Commerce encourages international trade

Through commerce we can secure a fair and equitable distribution of goods
throughout the world. With the help of transport and communication development,
countries can exchange their surplus commodities and earn foreign exchange, which is
very useful for importing machinery and sophisticated technology. It ensures faster
economic growth of the country.

9. Commerce benefits underdeveloped countries

Underdeveloped countries can import skilled labour and technical know-how from
developed countries. While the advance countries can import raw materials from
underdeveloped countries. This helps in laying down the seeds of industrialization in the
underdeveloped countries.

10. Commerce helps during emergencies

During emergencies like floods, earthquakes and wars, commerce helps in reaching the
essential requirements like foodstuff, medicines and relief measures to the affected areas.

Commerce helps in expansion

of aids to trade
With the growth in trade and
commerce there is growing
need for expansion and
modernization
of aids to trade. Aids to trade
such as banking,
communication, advertising and
publicity, trans-
port, insurance, etc., are
expanded and modernised for
the smooth conduct of
commerce.
7. Commerce helps in growth of
industrial development
Commerce looks after the
smooth distribution of goods
and services made available by
the in-
dustry. Without commerce,
industry will find it difficult to
keep the pace of production. It
helps
to increase demand for goods
on one hand and on the other
hand it helps industries by
getting
them the necessary raw
materials and other services.
Hence, commerce helps in
attaining better
division of labour and industrial
progress.
8. Commerce encourages
international trade
Through commerce we can
secure a fair and equitable
distribution of goods
throughout the
world. With the help of
transport and communication
development, countries can
exchange their
surplus commodities and earn
foreign exchange, which is very
useful for importing machinery
and sophisticated technology. It
ensures faster economic growth
of the country.
9. Commerce benefits
underdeveloped countries
Underdeveloped countries can
import skilled labour and
technical know-how from
developed
countries. While the advance
countries can import raw
materials from underdeveloped
countries.
This helps in laying down the
seeds of industrialization in the
underdeveloped countries.
10. Commerce helps during
emergencies
During emergencies like floods,
earthquakes and wars,
commerce helps in reaching the
essential
requirements like foodstuff,
medicines and relief measures
to the affected areas.
Commerce helps in expansion
of aids to trade
With the growth in trade and
commerce there is growing
need for expansion and
modernization
of aids to trade. Aids to trade
such as banking,
communication, advertising and
publicity, trans-
port, insurance, etc., are
expanded and modernised for
the smooth conduct of
commerce.
7. Commerce helps in growth of
industrial development
Commerce looks after the
smooth distribution of goods
and services made available by
the in-
dustry. Without commerce,
industry will find it difficult to
keep the pace of production. It
helps
to increase demand for goods
on one hand and on the other
hand it helps industries by
getting
them the necessary raw
materials and other services.
Hence, commerce helps in
attaining better
division of labour and industrial
progress.
8. Commerce encourages
international trade
Through commerce we can
secure a fair and equitable
distribution of goods
throughout the
world. With the help of
transport and communication
development, countries can
exchange their
surplus commodities and earn
foreign exchange, which is very
useful for importing machinery
and sophisticated technology. It
ensures faster economic growth
of the country.
9. Commerce benefits
underdeveloped countries
Underdeveloped countries can
import skilled labour and
technical know-how from
developed
countries. While the advance
countries can import raw
materials from underdeveloped
countries.
This helps in laying down the
seeds of industrialization in the
underdeveloped countries.
10. Commerce helps during
emergencies
During emergencies like floods,
earthquakes and wars,
commerce helps in reaching the
essential
requirements like foodstuff,
medicines and relief measures
to the affected are
TOPIC ONE
1. SCOPE OF COMMERCE
1.1 Definition of commerce
Commerce is a branch of
business. It is concerned with
the exchange of goods and
services. It
includes all those activities,
which directly or indirectly
facilitate that exchange.
Nearly every business
transaction is a form of
commerce: purchasing food at a
restaurant, buying
goods and selling goods in a
store, drilling for oil, etc.
Importance of Commerce
The importance of commerce
are mentioned in following
points:-
1. Commerce tries to satisfy
increasing human wants
Human wants are never ending.
They can be classified as 'Basic
wants' and 'Secondary wants'.
Commerce has made
distribution and movement of
goods possible from one part of
the world to
the other. Today we can buy
anything produced anywhere in
the world. This has in turn
enabled
man to satisfy his innumerable
wants and thereby promoting
social welfare.
2. Commerce helps to increase
our standard of living
Standard of living refers to
quality of life enjoyed by the
members of a society. When
man con-
sumes more products his
standard of living improves. To
consume a variety of goods he
must be
able to secure them first.
Commerce helps us to get what
we want at right time, right
place and at
right price and thus helps in
improving our standard of
living.
3. Commerce links producers
and consumers
Production is meant for ultimate
consumption. Commerce makes
possible to link producers and
consumers through retailers and
wholesalers and also through
the aids to trade. Consumers get
information about different
goods through advertisements
and salesmanship. The
manufacturers
are regularly informed about the
likes and dislikes of the
consumers through marketing
research.
Thus commerce creates contact
between the centers of
production and consumption
and links
them.
4. Commerce generates
employment opportunities
The growth of commerce,
industry and trade bring about
the growth of agencies of trade
such as
banking, transport,
warehousing, advertising, etc.
These agencies need people to
look after their
functioning. Increase in
production results in increasing
demand, which further results in
boost-
ing employment opportunities.
Thus development of commerce
generates more and more em-
ployment opportunities for
millions of people in a country.
5. Commerce increases national
income and wealth
When production increases,
national income also increases.
In a developed country,
manufactur-
ing industries and commerce
together accounts for nearly
80% of total national income. It
also
helps to earn foreign exchange
by way of exports and duties
levied on imports. Thus,
commerce
increases the national income
and wealth of a nation
TOPIC ONE
1. SCOPE OF COMMERCE
1.1 Definition of commerce
Commerce is a branch of
business. It is concerned with
the exchange of goods and
services. It
includes all those activities,
which directly or indirectly
facilitate that exchange.
Nearly every business
transaction is a form of
commerce: purchasing food at a
restaurant, buying
goods and selling goods in a
store, drilling for oil, etc.
Importance of Commerce
The importance of commerce
are mentioned in following
points:-
1. Commerce tries to satisfy
increasing human wants
Human wants are never ending.
They can be classified as 'Basic
wants' and 'Secondary wants'.
Commerce has made
distribution and movement of
goods possible from one part of
the world to
the other. Today we can buy
anything produced anywhere in
the world. This has in turn
enabled
man to satisfy his innumerable
wants and thereby promoting
social welfare.
2. Commerce helps to increase
our standard of living
Standard of living refers to
quality of life enjoyed by the
members of a society. When
man con-
sumes more products his
standard of living improves. To
consume a variety of goods he
must be
able to secure them first.
Commerce helps us to get what
we want at right time, right
place and at
right price and thus helps in
improving our standard of
living.
3. Commerce links producers
and consumers
Production is meant for ultimate
consumption. Commerce makes
possible to link producers and
consumers through retailers and
wholesalers and also through
the aids to trade. Consumers get
information about different
goods through advertisements
and salesmanship. The
manufacturers
are regularly informed about the
likes and dislikes of the
consumers through marketing
research.
Thus commerce creates contact
between the centers of
production and consumption
and links
them.
4. Commerce generates
employment opportunities
The growth of commerce,
industry and trade bring about
the growth of agencies of trade
such as
banking, transport,
warehousing, advertising, etc.
These agencies need people to
look after their
functioning. Increase in
production results in increasing
demand, which further results in
boost-
ing employment opportunities.
Thus development of commerce
generates more and more em-
ployment opportunities for
millions of people in a country.
5. Commerce increases national
income and wealth
When production increases,
national income also increases.
In a developed country,
manufactur-
ing industries and commerce
together accounts for nearly
80% of total national income. It
also
helps to earn foreign exchange
by way of exports and duties
levied on imports. Thus,
commerce
increases the national income
and wealth of TOPIC ONE1. SCOPE OF COMMERCE1.1 Definition of
commerceCommerce is a branch of business. It is concerned with the exchange of goods and services.
Itincludes all those activities, which directly or indirectly facilitate that exchange.Nearly every business
transaction is a form of commerce: purchasing food at a restaurant, buyinggoods and selling goods in a
store, drilling for oil, etc.Importance of CommerceThe importance of commerce are mentioned in
following points:-1. Commerce tries to satisfy increasing human wantsHuman wants are never ending.
They can be classified as 'Basic wants' and 'Secondary wants'.Commerce has made distribution and
movement of goods possible from one part of the world tothe other. Today we can buy anything
produced anywhere in the world. This has in turn enabledman to satisfy his innumerable wants and
thereby promoting social welfare.2. Commerce helps to increase our standard of livingStandard of living
refers to quality of life enjoyed by the members of a society. When man con-sumes more products his
standard of living improves. To consume a variety of goods he must beable to secure them first.
Commerce helps us to get what we want at right time, right place and atright price and thus helps in
improving our standard of living.3. Commerce links producers and consumersProduction is meant for
ultimate consumption. Commerce makes possible to link producers andconsumers through retailers and
wholesalers and also through the aids to trade. Consumers getinformation about different goods
through advertisements and salesmanship. The manufacturersare regularly informed about the likes and
dislikes of the consumers through marketing research.Thus commerce creates contact between the
centers of production and consumption and linksthem.4. Commerce generates employment
opportunitiesThe growth of commerce, industry and trade bring about the growth of agencies of trade
such asbanking, transport, warehousing, advertising, etc. These agencies need people to look after
theirfunctioning. Increase in production results in increasing demand, which further results in boost-ing
employment opportunities. Thus development of commerce generates more and more em-ployment
opportunities for millions of people in a country.5. Commerce increases national income and
wealthWhen production increases, national income also increases. In a developed country, manufactur-
ing industries and commerce together accounts for nearly 80% of total national income. It alsohelps to
earn foreign exchange by way of exports and duties levied on imports. Thus, commerceincreases the
national income and wealth of a natio

Commerce helps in expansion

of aids to trade
With the growth in trade and
commerce there is growing
need for expansion and
modernization
of aids to trade. Aids to trade
such as banking,
communication, advertising and
publicity, trans-
port, insurance, etc., are
expanded and modernised for
the smooth conduct of
commerce.
7. Commerce helps in growth of
industrial development
Commerce looks after the
smooth distribution of goods
and services made available by
the in-
dustry. Without commerce,
industry will find it difficult to
keep the pace of production. It
helps
to increase demand for goods
on one hand and on the other
hand it helps industries by
getting
them the necessary raw
materials and other services.
Hence, commerce helps in
attaining better
division of labour and industrial
progress.
8. Commerce encourages
international trade
Through commerce we can
secure a fair and equitable
distribution of goods
throughout the
world. With the help of
transport and communication
development, countries can
exchange their
surplus commodities and earn
foreign exchange, which is very
useful for importing machinery
and sophisticated technology. It
ensures faster economic growth
of the country.
9. Commerce benefits
underdeveloped countries
Underdeveloped countries can
import skilled labour and
technical know-how from
developed
countries. While the advance
countries can import raw
materials from underdeveloped
countries.
This helps in laying down the
seeds of industrialization in the
underdeveloped countries.
10. Commerce helps during
emergencies
During emergencies like floods,
earthquakes and wars,
commerce helps in reaching the
essential
requirements like foodstuff,
medicines and relief measures
to the affected areas.
1.2 Structure of commerce
1. Retail
The word ‘Retailer’ had been
derived from the French word
‘Re-tailer’ which means ‘to-cut
again’. Obviously then, retailing
means to cut in small portions
from large lumps of goods. A
retailer is last middlemen in the
chain of distribution of goods to
consumers. He is a link between
the wholesalers and the
consumer.
2. Wholesale
A person or firm that buys
large quantity of goods from
various producers or vendors,
ware-
houses them, and resells to
retailers. Wholesalers who carry
only non-competing goods or
lines
are called distributors
Commerce helps in expansion
of aids to trade
With the growth in trade and
commerce there is growing
need for expansion and
modernization
of aids to trade. Aids to trade
such as banking,
communication, advertising and
publicity, trans-
port, insurance, etc., are
expanded and modernised for
the smooth conduct of
commerce.
7. Commerce helps in growth of
industrial development
Commerce looks after the
smooth distribution of goods
and services made available by
the in-
dustry. Without commerce,
industry will find it difficult to
keep the pace of production. It
helps
to increase demand for goods
on one hand and on the other
hand it helps industries by
getting
them the necessary raw
materials and other services.
Hence, commerce helps in
attaining better
division of labour and industrial
progress.
8. Commerce encourages
international trade
Through commerce we can
secure a fair and equitable
distribution of goods
throughout the
world. With the help of
transport and communication
development, countries can
exchange their
surplus commodities and earn
foreign exchange, which is very
useful for importing machinery
and sophisticated technology. It
ensures faster economic growth
of the country.
9. Commerce benefits
underdeveloped countries
Underdeveloped countries can
import skilled labour and
technical know-how from
developed
countries. While the advance
countries can import raw
materials from underdeveloped
countries.
This helps in laying down the
seeds of industrialization in the
underdeveloped countries.
10. Commerce helps during
emergencies
During emergencies like floods,
earthquakes and wars,
commerce helps in reaching the
essential
requirements like foodstuff,
medicines and relief measures
to the affected areas.
1.2 Structure of commerce
1. Retail
The word ‘Retailer’ had been
derived from the French word
‘Re-tailer’ which means ‘to-cut
again’. Obviously then, retailing
means to cut in small portions
from large lumps of goods. A
retailer is last middlemen in the
chain of distribution of goods to
consumers. He is a link between
the wholesalers and the
consumer.
2. Wholesale
A person or firm that buys
large quantity of goods from
various producers or vendors,
ware-
houses them, and resells to
retailers. Wholesalers who carry
only non-competing goods or
lines
are called distribu
1.2 Structure of commerce
1. Retail
The word ‘Retailer’ had been derived from the French word ‘Re-tailer’ which means ‘to-cut
again’. Obviously then, retailing means to cut in small portions from large lumps of goods. A
retailer is last middlemen in the chain of distribution of goods to consumers. He is a link between
the wholesalers and the consumer.
2. Wholesale
A person or firm that buys large quantity of goods from various producers or vendors,
ware-houses them, and resells to retailers. Wholesalers who carry only non-competing goods or
lines are called distributors

.3 Branches of commerce
There are various human
activities as shown below
Since commerce embraces all
those activities of taking goods
and services from the
production
centre to the consumption, a
great deal of obstacles are
crossed. In between these two
ends the
obstacles faced are difficulties
of trade, transportation,
distribution, finance, storage,
insurance
and publicity. The above
mentioned difficulties are
removed by the various
branches of
commerce. These branches are:
Trade: The channel through
which goods are passed from
the producer to the consumer is
termed as trade. It is the agency
which facilitate proper flow of
goods. Trade involves buying
and
selling of goods.
Transport: Goods produced at
the end of the producer are
passed to the consumer with the
help
of transport facilities. The
goods are transported from the
place of low demand to the
place of
greater demand. Transport helps
in the creation of place utility
for the products. The growth of
commerce largely vest on
proper modes of transport like
road, rail, sea and air.
Distribution: It is not possible
on part of the producers to make
direct contact with the con-
sumers which are millions in
numbers. A chain of middlemen
like wholesalers, retailers,
brokers
and other agents help in the
process of distribution of goods.
The hindrances of persons is
being
removed with the help of
different middlemen.
Insurance: A great deal of risks
are involved during the course
of transportation of goods. The
risks in connection with goods
are risks of fire or theft. These
risks develop a state of fear of
losses and these losses are
covered by the help of
insurance.
3
1.3 Branches of commerce
There are various human activities as shown below
DIAGRAM
Since commerce embraces all those activities of taking goods and services from the
production centre to the consumption, a great deal of obstacles are crossed. In between
these two ends the obstacles faced are difficulties of trade, transportation, distribution,
finance, storage, insurance and publicity. The above mentioned difficulties are removed
by the various branches of commerce.
These branches are:
Trade: The channel through which goods are passed from the producer to the consumer
is termed as trade. It is the agency which facilitate proper flow of goods. Trade involves
buying andselling of goods.
Transport: Goods produced at the end of the producer are passed to the consumer with
the help of transport facilities. The goods are transported from the place of low demand
to the place of greater demand. Transport helps in the creation of place utility for the
products. The growth of commerce largely vest on proper modes of transport like road,
rail, sea and air.
Distribution: It is not possible on part of the producers to make direct contact with the
con-sumers which are millions in numbers. A

chain of middlemen like wholesalers, retailers, brokers and other agents help in the
process of distribution of goods. The hindrances of persons is being removed with the
help of different middlemen.
Insurance: A great deal of risks are involved during the course of transportation of
goods. The risks in connection with goods are risks of fire or theft. These risks develop a
state of fear of losses and these losses are covered by the help of insurance.
Advertisement: Since the consumers are scattered over distant places, they may not be
aware of the availability of goods. Absence of knowledge of product puts a lot of
hindrances on purchase of goods and this hindrance of knowledge is removed by
advertisement and publicity.
Banking: There is a time lag between the production and sale of goods and during this
period, the need of finance exert a great deal of influences. The commercial banks and
the other schedule banks play a vital role in mitigating these financial crises. Banks also
facilitate in international trade by providing long-term financial assistances.
Warehousing: The production of goods takes place in the anticipation of demand and
goods are produced during the period of less demand. There is a growing need to store
the goods in a ware-house so that those can be utilized during the period of more
demand. The facility of warehouse removes the hindrances of time. The need for
warehouse is greater in foreign trade because there is more time gap between
production and consumption.
Communication: The buyers and sellers are intimated through various communicating
agencies. The producer intimate the buyer about the production of goods, and the buyer
sends orders for supply of goods. The post office, telephone, telex and fax helps in
communication between the producer and consumers.
1.4 Factors of production in the context of commerce
An economic term to describe the inputs that are used in the production of goods or
services in the attempt to make an economic profit. The factors of production include
land, labor, capital and entrepreneurship.
Natural Resources - sometimes called land - consists of all the gifts of nature. This
includes mineral deposits, water, arable land, vegetation, natural forests, marine
resources, the atmosphere, sunshine and animal life. They are a fixed supply. If we
want more of them, their avail-ability cannot be increased. It is possible to exploit some
of the resources, for example, minerals. Once the minerals are used, they cannot be
replaced.
Labour - is defined as the exercise of human mental and physical effort in the
production of goods and services, where humans are rewarded in the form of an
income. The quality of labour is depends on the size of the population and the portion
that is able and willing to work. The quality of labour, which is described by the skill,
knowledge and health of the workers, is important.
Capital - is made up of manufactured resources, such as machines, tools and buildings
which are used in the production of other goods and services. It is those tangible things
that are used to pro-duce other things. These resources do not have an unlimited life.
Entrepreneurship - is the availability of natural resources, labour and capital is not
sufficient to ensure economic success. These factors of production have to be organised
by people who see opportunity and are willing to take risks to producing the goods,
believing that they will be sold. These people are called entrepreneurs. They are the
driving force behind the production. They