What is commerce? Types, Branches, functions


What is Commerce?

Commerce is a process of exchanging goods and services. It includes all the activities which are directly or indirectly involves the exchanges. Commerce is a branch of business.

Commerce includes the distribution process of the products from manufactures to the consumers.

According to James Stephenson,

Commerce is an organized system for the exchange of goods between the members of the industrial world.”

According to Wikipedia,

“Commerce relates to “the exchange of goods and services, especially on a large scale.


Every business transactions are the form of commerce, i.e. buying a new jacket, purchasing a new car, selling tea at the stall, etc. are the form of commerce.


Basically, there are four types of e-commerce. These are the following:

  • Business-to-Business (B2B)

Business to Business e-commerce means, there a business provides their services or products to other business. Business does not provide services or products directly to consumers. they supply their raw material to another business, and they build the products and then sell to the consumers.

Example:  Intel makes microchip for Dell, Samsung makes Apple mobile display.

  • Business-to-Consumer (B2C)

Business to Consumers e-commerce process means when Business sells its products and services to the consumers directly. it is the most preferred method of e-commerce. B2C is a traditional method of commerce, But e-commerce is on the internet.

Examples: Newegg.com, Overstock.com, Amazon.com

  • Consumer-to-Consumer (C2C)

Consumer to Consumer means when consumer sells their products or services directly to another consumer. it is the best platform for those consumers who want to get used products.

Example: Olx.com, Quicker.com

  • Consumer-to-Business (C2B)

Consumer to business means when consumers sell their products or services to the business. it is best-preferred method when the company needs to get feedback of the people.


  • Trade 

Trade is the channel through which manufactures passed their products to the consumers. Trade is a process of providing products to final consumers. The trade involves buying and selling of goods.

  • Transport

Transport is a medium between production house to consumer’s house. Transport provides goods to consumers. Usually, the manufacturing units are far away from the city, so transportation helps to provide products in the city market.

  • Distribution

Manufacturers cannot sell their products directly to millions of consumers, wholesalers retailers, and middlemen help in it. Manufactures sell their products to wholesalers, wholesalers sell to retailers and finally, retailers sell to the consumers. So, it is the process of distribution of the products.

  • Insurance

Insurance is the security of goods from various aspects, i.e fire, theft, damage of products etc. it removes the hindrance of threat. it provides security to all the trades. Because theft and fire are normal in trade, which creates anxiety into the traders.

  • Communication

The buyers and sellers are connected through various communicating channels. The producer aware the buyer about the new goods, and then the buyer sends orders for supply of goods.

  • Warehousing

Manufacturers sell goods in huge quantity to the wholesalers. So, wholesalers need to have big places to store the goods. it removes the hindrance of time.

  • Banking

Usually, It takes a long time to produces the goods and supply in the market, during this period of time the company needs financial support, to providing financial supports commercial banks helps on it.


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