Commerce – definition and meaning
Commerce refers to the buying and selling of goods and services for money or in kind. It is a branch of business. It includes all the processes that have to do with the exchange of products and services. The term usually refers to doing business on a large scale. Specifically, on a scale large enough to require transportation from seller to buyer. The transportation may be across a town, a state or county, or from country-to-country.
The term ‘commerce’ usually means the same as ‘trade.’ Trade also means buying, selling, or exchanging goods and services between people, firms, and countries.
Commerce focuses on the distribution side of the business, rather than production. Some economists, however, say that it includes all business activities and functions. In other words, everything to do with the transference of goods and services from producers – including production – to consumers.
Businesses aim everything they produce at consumers. To facilitate demand, there needs to be an adequate distribution channel. This is where commerce comes in.
The term includes the legal, political, social, economic, cultural, and technological systems. These systems operate within any country or internationally. It may also refer to an environment or system that affects the business prospects of national economies.
According to BusinessDictionary.com, commerce is:
“Exchange of goods or services for money or in kind, usually on a scale large enough to require transportation from place to place or across city, state, or national boundaries.”
Commerce vs. a transaction
Commerce usually refers to the macroeconomic purchase of goods and services. Macroeconomic purchase is buying on a large scale. However, a transaction refers to just one item. In other words, the buying and selling of a single unit by a consumer.
Commerce includes all the transactions in the purchase and sale of that product. It often refers to international trade. International trade is the purchase and sale of goods and services between countries.
US Department of Commerce
When we manage it properly; commercial activity can improve people’s standard of living. It can enhance a nation’s standing in the world. However, regulation is crucial. Otherwise, large corporations may become too powerful and bad for the majority of citizens.
In the United States, the Department of Commerce exists to promote and manage business activity. It is a Cabinet department of the US government. The Department aims to promote economic growth.
It gathers demographic and economic data for business and helps in government decision-making. The Department also helps establish industrial standards. Its main purpose is to create employment, promote economic growth, and encourage long-term and sustainable development. Above all, it aims to improve the standard of living of all US citizens.
The UK equivalent is the Department for Business, Energy, and Industrial Strategy (BEIS).
What is e-commerce?
E-commerce is business we do on the Internet. In other words, trading online. The term is short for ‘electronic commerce.’
It covers a wide range of business types, from online shops, auction sites, and music marketplaces. E-commerce also includes trading in financial instruments and the exchange of goods and services between corporations.
It has dramatically changed how many of us work and shop. In fact, it has changed how we go about our daily lives.
Consumers can buy and sell goods online without the barriers of distance or time.
The internet is changing everything
Experts believe that e-commerce will represent more than half of all retail sales in the UK by 2025.
The boundaries between conventional and electronic business activities are becoming blurred. As more companies move sections of their operations onto the Internet, these boundaries will disappear.
Social commerce is a type of online commercial activity. It uses social networking websites to help in the trading of goods. The term is relatively new. It uses online communities, ratings, social advertising, shares, and shops inside social networking websites to purchase and sell things.
Yahoo first used this term in 2005 to describe a series of collaborative shopping tools. Examples included pick lists that people shared, ratings, and other content-sharing advice that users generated.
For thousands of years, humans have been trading. Doing business has happened in pretty much the same way. A merchant and a customer meet face-to-face in the marketplace. They then exchange one product for money or another product. However, the Internet has changed all that.