COMMERCE: COMPONENT OF BUSINESS:-
The second important component of business is commerce. The process f selling or supplying goods or services produced by industries is called commerce. Commerce plays roles to transfer products from production places to consumers hands. In this modern age, all the things which are necessary for buying and selling of goods come under commerce.
In this modern age, the scope of commerce has become very wide. In addiction to selling and buying of goods and services, other ancillary business activities for its help such as transportation, insurance, warehouse, advertisement, communication, bank, other financial institution etc are engaged in the removal of hindrance of people's, place, and time in the excangeof commodities.
The main activities that are included in commerce can be classified into three categories. They are trade, ancillary function and services enterprises.
1) TRADE
Trade mean buying and selling of goods with the objective of making profit. It help the producer and seller to transfer goods to the hands of customer. Beside, customers and businessmen get benefits and selling of raw materials, semi-finished and finished goods. Trade can be divided into two types:-
-National Trade
-Foreign Trade
A) National Trade
Buying and selling of goods or other materials only within the border of a country is national trade, which is also called as home or internal trade. National trade can be divided into two types they are wholesale trade and retail trade
B) Foreign Trade
Exchange of goods or services between two or more countries is called foreign trade.Import trade, Export trade, and entreport trade are included in foreign trade.
2) Ancillary/ auxiliary Function of Business
For running business, trade or industry in a smooth as well as successful way, help is taken from different institution or individuals. Present age of business cannot be imagined in the absence of services of banks, financial institutions, transport and communication, insurance, warehouse, advertisement, etc. so these are called ancillary/ auxiliary services/functions.
a) Banks and financial institution
Banks and financial institution have very important roles in providing loans to an industry and business and keeping their surplus amount in a safe position. accepting deposite, granting loan, and transferring money from one place to another are the major activities provided by banks. in addiction to these services, modern banks and financial institutions also offer expert financial advice and specialized service required by industrialist and businessman.
b) Transportation
Physical means of transferring goods from the place of production to the place of consumption is transportation.It concerns itself with the policies and systems themselves, as well as with their impacts on and relationships with other aspects of the social, economic and physical environment.
Although the transportation needs of cities and nations around the world differ in detail, there is much benefit to be derived by sharing research findings and practical experience. Transportation lends itself to information exchange by publishing carefully selected papers which advance the international fund of knowledge. Transportation is relevant to all parts of the world: industrialized, newly industrialized or developing. Its mission is simply to help improve the transportation of people and goods by bringing an improved understanding of the subject to the theorists, practitioners and policy makers who study it.
c) Communication
different means of communication such as post offices, telephones, telex, radio, newspaper, computers, television etc have emerged as auxiliary service to industry and commerce, and help much in business activities. Communication is a function that is indispensable for commerce. All types of trade transactions, receiving of trade inquiries, sending of information about dispatch of goods, receiving of payment, etc. are possible with the help of Communication
Trade business cannot function efficiently if the buyers and sellers do not make proper use of communication channels. It is through communication that all formalities of transaction are completed. An efficient communication system brings businessman close to each other not only in one country but in the whole world.
Management and supervision also remain incomplete and shabby in the absence of proper communication. Communication means sharing of ideas in common. When we communicate, we are trying to establish a rationale with someone. We are trying to share information, ideas or attitudes. Communication is basically the fine-tuning of the receiver and the sender, aimed at effecting a particular message.
The primary criterion for communication to take place is the transfer of information from one person to another. It refers to exchange of ideas, feelings, emotions, knowledge and information between two or more persons. Messages, whether oral or written, do not constitute complete communication. Communication includes every thing in between i.e. gestures, facial expressions, silence etc. In a broader sense communication refers to the whole process of the life of men in relation to group and includes an exchange of information, a system of communicating, and a process by which meanings are exchanged among human beings.
One cannot have good relations with outside traders and thus cannot run his business successfully if one does not understand the importance of communication. A businessman has to establish links with his suppliers, intermediaries and consumers. This is needed to procure various inputs and then sell the finished goods. Trade activities necessitate establishing links with transporters, bankers, insurers, and ware house keepers, etc. so that volume of trade is increased. Communication provides a channel to establish outside links. Communication comes to the aid of managers also and helps them to convey their thoughts, objectives, orders, appeals, observations., instructions, suggestions, etc to subordinates operating at different levels of the organization for the purpose of planning administrative policies.
d) Insurance
Insurance is very important to keep secure the business from the risk to theft, fire, accident, damages, etc. the arrangement of compensation for possible damage\ loss makes business self-confident and gives continuity.
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; an insured, or policyholder, is the person or entity buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.
e) Advertisement
The important of advertisement is growing daily for selling goods and services. Advertising is a form of communication used to persuade an audience (viewers, readers or listeners) to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common. Advertising messages are usually paid for by sponsors and viewed via various traditional media; including mass media such as newspaper, magazines, television commercial, radio advertisement, outdoor advertising or direct mail; or new media such as website and text massege.
Commercial advertisers often seek to generate increased consumption of their products or services through "Branding," which involves the repetition of an image or product name in an effort to associate certain qualities with the brand in the minds of consumers. Non-commercial advertisers who spend money to advertise items other than a consumer product or service include political parties, interest groups, religious organizations and governmental agencies. Nonprofit organizations may rely on free modes of persuasion, such as a public service announcement (PSA).
f) Warehousing
After the production of goods and until they have been sold off, they should be kept in warehouse. The ware house creates time utility of products. now a day, service of private public, leased and bounded warehouse is available. Because of time gap between the production and consumption of goods, the role of warehousing is seen very important. Warehouseing and cold storage service are also equally important auxiliary services to industry and commerce.
3) Service Enterprises
Apart from industries, trade, and aucillary\auxiliary function the service- oriented business like hotels, restaurant, film, saloon etc are included in business. such business provided facilities and recreation to consumers. such sctivities do not produce goods nor sell them but cater only services so they are supposed to be the parts of commerce.
so in this age of business only buying and selling of goods is not only business. Industries of production goods or services, businesses of buying and selling goods, other auxiliary\ subsidiary business provide necessary help to industries and service-oriented businesses are the parts of business. Now the concept of thinking business as the synonym of commercehas totally changed.
The second important component of business is commerce. The process f selling or supplying goods or services produced by industries is called commerce. Commerce plays roles to transfer products from production places to consumers hands. In this modern age, all the things which are necessary for buying and selling of goods come under commerce.
In this modern age, the scope of commerce has become very wide. In addiction to selling and buying of goods and services, other ancillary business activities for its help such as transportation, insurance, warehouse, advertisement, communication, bank, other financial institution etc are engaged in the removal of hindrance of people's, place, and time in the excangeof commodities.
The main activities that are included in commerce can be classified into three categories. They are trade, ancillary function and services enterprises.
1) TRADE
Trade mean buying and selling of goods with the objective of making profit. It help the producer and seller to transfer goods to the hands of customer. Beside, customers and businessmen get benefits and selling of raw materials, semi-finished and finished goods. Trade can be divided into two types:-
-National Trade
-Foreign Trade
A) National Trade
Buying and selling of goods or other materials only within the border of a country is national trade, which is also called as home or internal trade. National trade can be divided into two types they are wholesale trade and retail trade
B) Foreign Trade
Exchange of goods or services between two or more countries is called foreign trade.Import trade, Export trade, and entreport trade are included in foreign trade.
2) Ancillary/ auxiliary Function of Business
For running business, trade or industry in a smooth as well as successful way, help is taken from different institution or individuals. Present age of business cannot be imagined in the absence of services of banks, financial institutions, transport and communication, insurance, warehouse, advertisement, etc. so these are called ancillary/ auxiliary services/functions.
a) Banks and financial institution
Banks and financial institution have very important roles in providing loans to an industry and business and keeping their surplus amount in a safe position. accepting deposite, granting loan, and transferring money from one place to another are the major activities provided by banks. in addiction to these services, modern banks and financial institutions also offer expert financial advice and specialized service required by industrialist and businessman.
b) Transportation
Physical means of transferring goods from the place of production to the place of consumption is transportation.It concerns itself with the policies and systems themselves, as well as with their impacts on and relationships with other aspects of the social, economic and physical environment.
Although the transportation needs of cities and nations around the world differ in detail, there is much benefit to be derived by sharing research findings and practical experience. Transportation lends itself to information exchange by publishing carefully selected papers which advance the international fund of knowledge. Transportation is relevant to all parts of the world: industrialized, newly industrialized or developing. Its mission is simply to help improve the transportation of people and goods by bringing an improved understanding of the subject to the theorists, practitioners and policy makers who study it.
c) Communication
different means of communication such as post offices, telephones, telex, radio, newspaper, computers, television etc have emerged as auxiliary service to industry and commerce, and help much in business activities. Communication is a function that is indispensable for commerce. All types of trade transactions, receiving of trade inquiries, sending of information about dispatch of goods, receiving of payment, etc. are possible with the help of Communication
Trade business cannot function efficiently if the buyers and sellers do not make proper use of communication channels. It is through communication that all formalities of transaction are completed. An efficient communication system brings businessman close to each other not only in one country but in the whole world.
Management and supervision also remain incomplete and shabby in the absence of proper communication. Communication means sharing of ideas in common. When we communicate, we are trying to establish a rationale with someone. We are trying to share information, ideas or attitudes. Communication is basically the fine-tuning of the receiver and the sender, aimed at effecting a particular message.
The primary criterion for communication to take place is the transfer of information from one person to another. It refers to exchange of ideas, feelings, emotions, knowledge and information between two or more persons. Messages, whether oral or written, do not constitute complete communication. Communication includes every thing in between i.e. gestures, facial expressions, silence etc. In a broader sense communication refers to the whole process of the life of men in relation to group and includes an exchange of information, a system of communicating, and a process by which meanings are exchanged among human beings.
One cannot have good relations with outside traders and thus cannot run his business successfully if one does not understand the importance of communication. A businessman has to establish links with his suppliers, intermediaries and consumers. This is needed to procure various inputs and then sell the finished goods. Trade activities necessitate establishing links with transporters, bankers, insurers, and ware house keepers, etc. so that volume of trade is increased. Communication provides a channel to establish outside links. Communication comes to the aid of managers also and helps them to convey their thoughts, objectives, orders, appeals, observations., instructions, suggestions, etc to subordinates operating at different levels of the organization for the purpose of planning administrative policies.
d) Insurance
Insurance is very important to keep secure the business from the risk to theft, fire, accident, damages, etc. the arrangement of compensation for possible damage\ loss makes business self-confident and gives continuity.
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; an insured, or policyholder, is the person or entity buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.
e) Advertisement
The important of advertisement is growing daily for selling goods and services. Advertising is a form of communication used to persuade an audience (viewers, readers or listeners) to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common. Advertising messages are usually paid for by sponsors and viewed via various traditional media; including mass media such as newspaper, magazines, television commercial, radio advertisement, outdoor advertising or direct mail; or new media such as website and text massege.
Commercial advertisers often seek to generate increased consumption of their products or services through "Branding," which involves the repetition of an image or product name in an effort to associate certain qualities with the brand in the minds of consumers. Non-commercial advertisers who spend money to advertise items other than a consumer product or service include political parties, interest groups, religious organizations and governmental agencies. Nonprofit organizations may rely on free modes of persuasion, such as a public service announcement (PSA).
f) Warehousing
After the production of goods and until they have been sold off, they should be kept in warehouse. The ware house creates time utility of products. now a day, service of private public, leased and bounded warehouse is available. Because of time gap between the production and consumption of goods, the role of warehousing is seen very important. Warehouseing and cold storage service are also equally important auxiliary services to industry and commerce.
3) Service Enterprises
Apart from industries, trade, and aucillary\auxiliary function the service- oriented business like hotels, restaurant, film, saloon etc are included in business. such business provided facilities and recreation to consumers. such sctivities do not produce goods nor sell them but cater only services so they are supposed to be the parts of commerce.
so in this age of business only buying and selling of goods is not only business. Industries of production goods or services, businesses of buying and selling goods, other auxiliary\ subsidiary business provide necessary help to industries and service-oriented businesses are the parts of business. Now the concept of thinking business as the synonym of commercehas totally changed.
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