Concept
Commerce and trade are two distinct terms involved in business activities. Trade is a subpart of commerce and carries narrow scope in comparison to commerce.
In simple terms, trade refers to buying and selling of goods between customers and sellers in return for money. Whereas, commerce in addition to buying and selling of goods also includes all those activities needed for completing exchange of goods between producers to ultimate consumers. It includes various services which aid trade such as transportation, insurance, warehouses, advertising, banking and many more.
Trading activities bring association between seller and buyers. Commerce links together the producer of goods and end consumers by facilitating the exchange. Trade is a social activity as it aims at satisfying the needs of buyers and sellers.
But commerce focuses on earning profits for several parties involved in its services and thereby is an economic activity. Dissimilarities between the trade and commerce can be well-understood more clearly from comparison chart given below.
Difference between Business, Commerce, and Trade
| Basis of Difference | Business | Commerce | Trade |
|---|---|---|---|
| Meaning | Business refers to all those activities which are done with the aim of earning profits. | Commerce refers to all activities which facilitates the exchange of goods from producer to end consumer. | Trade refers to exchange of products or services among buyers and sellers in return for money. |
| Scope | Wider. It includes both trade and commerce within its activities. | Wider than trade, as it comprises of activities which supports trade. | Narrower as is concerned with only buying and selling of goods. |
| Connectivity | Between owner and clients. | Between producer and consumer. | Between buyer and seller. |
| Capital needed | Huge amount of capital is needed. | Requires less capital. | More amount of capital needed. |
| Side represented | Supply side of the product. | Only demand side. | Both demand and supply side. |
| Risk level | Riskier than trade and commerce. | More risky than trade. | Low risk |
| Transactions frequency | Regular | Regular | Isolated |
| Employment Opportunities | More employment opportunities as large number of people are required for performing different tasks. | Large number of opportunities due to presence of many activities. | Very few. |
