Commerce is a variety of activities which represent exchanging, buying, selling, distributing valuable products (goods and services) between economic actors that are individual entrepreneurs, small companies and large corporations, government institutions, etc. Traditionally, a term “commerce” relates to a larger, macroeconomic sphere of trading and describes trading relations between companies on a national and international levels.
Commerce, business, trade and transactions
Commerce and business as concepts might sometimes be used as synonyms, but it’s important to understand the difference between them. The key distinction is that commerce doesn’t include the production stage and focuses only on relocation, distribution and movement of goods. Commerce might be viewed as a component part of business.
Commerce and trade also have similar meanings sometimes, although their meanings aren’t completely the same, so it’s clearly necessary to distinguish these terms. While both terms are about selling and purchasing, commerce also include such things as storage, transportation, promoting and insurance of goods and services. Commerce, as a term, covers not only economic processes, but also all kinds of legal, social and political activities involved in the large-scale exchange of products.
Transaction is one more term which is frequently used when talking about commerce. In general, a transaction is a single occasion of buying or selling a single item, while commerce includes all transactions of that item from a producer to a final consumer.
History and social impact of commerce
Commerce has existed since the first exchange of goods happened in the pre-historic times. The invention of currency and development of larger trading routes and markets have provided the necessary opportunities for the economic growth. Commerce has always been crucially important for the comfortable and successful life of the country’s population. There’s a direct correlation between commerce and social well-being, because economical and social welfare depends on how effectively managed the commerce is. When commercial activities are approached competently, it quickly leads to the raise of living standards and an overall level of development, affecting the citizens’ income and job opportunities.
At the same time, commercial activity should be controlled, because when commerce is managed with no restrictions it might bring negative effects for the population in general, pursuing only business goals and ignoring social needs. Throughout the history, various organizations have been created for controlling and managing commercial activities at different levels. For instance, at the national level in the U.S. these activities are regulated by the Department of Commerce, while in the UK it is managed by the Department for Business, Energy, and Industrial Strategy (BEIS). At the international level, commerce is regulated by such organizations as the World Trade Organization (WTO) and some others.
As the world constantly evolves, the commercial sphere also undergoes major innovations. The most recent and noticeable change has happened after the provision of global access to the Net. Commercial activities have gradually moved into the online sphere, causing mass changes in the way commerce is managed.
E-commerce is a relatively new type of commerce that represents commercial activity being organized online, using different sources on the Internet like marketplaces, social networks, streaming services and other options. It also includes different types of activities, but most importantly it is connected with any type of financial information exchange via the Net.
In the past, commerce was strongly affected by logistics and transportation difficulties, so only huge corporations had enough resources to engage in export trading. But after the public Internet became available, smaller businesses aren’t limited anymore by such restraints. Now there are options and possibilities for companies of all sizes to enter international trading. In the coming years, it is strongly believed that E-commerce will take the biggest part of the overall economic activity in the world.