Branches of Commerce | notes for Commerce students

Commerce

All activities which are connected with taking goods and services from producer's to users come under the purview of Commerce. In between these two ends a number of obstacles  have to be crossed. The goal of Commerce is to ensure a proper flow of goods and services for the benefit of both producer and consumers. There may be difficulties with regards to trade, transport, distribution, finance, storage, insurance, publicity, etc. These aspects are dealt with and various  difficulties are removed by the Branches of Commerce.

Branches of Commerce

The branches of Commerce are discussed as follows :

 (i) Trade :  There is a need for some channel which may remit goods from the producers to the users. The producer may not come into direct contact with consumers or user of their products. There is a need for some agency which can facilitate the flow of goods. This is possible with the help of trade. Trade is the process of purchasing or procuring of goods and services and selling them to those who need them.

 (ii)  Transport : Goods may be produced at places where they are in less demand. These goods are to be taken to the place of consumption. With the help of transport facilities we can create place utility in goods. The goods are taken from a place where there is less demand, to the place where they are in more demand. The place utility helps the producer to increase the production and earn a remunerative price. The consumer is also helped by supplying him with the goods which otherwise might have not reached him. The various modes of I,e. road, rail, sea, air have helped the growth of Commerce and industry. The producer can produce goods at any scale, the demand will be there, provided the goods suit the consumers.

(iii)  Distribution  :  The producer of goods may not be able to come into direct contact with the consumers. in the present day world, the consumers are in millions and it is not possible for the producer to know the consumers. The middleman purchase goods from the producer and take them to the consumer. Both sides are relieved of their worries. The chain of wholesaler, retailers, brokers, agents, etc, operate between the producers and the consumers and remove hindrance of persons.

(iv) Banking  : There is always a time lag between production and sale of goods. The trader purchase goods from the producers and then sell to the consumers. It takes time to collect money after sale. There is a need to finance trade activities. The commercial banks helps trade in shape of overdraft, loans, or cash credit. The banks pay an important role in International trade where trading parties are not known to each other. The documents are sent through banks who release the documents after collecting the dues. So banks help in overcoming financial problem.

(v) Warehousing : Goods are produced in anticipation of demand. They may also be produced at a time when they are not needed. So there is a need to store goods upto a time these are not required for consumption. The hindrance of time is overcome with the help of warehouse. The foreign trade needs the help of warehouses even because there is more time gap between production and consumption. Agricultural products are produced seasonally, but they are required throughout the year. So there is need to store them so that they may be supplied according to demand.

(vi) Advertisement and salesmanship : The consumer may not be aware of the availability of various goods in the market. The absence of information about goods is a great hindrance in the way of consumers buying them. The producer will also like to increase his customer. The advertisement and salesmanship help in informing the consumer about the availability and usefulness of various products in the market.

(vii) Insurance  : There is a risk involved in transporting goods from one place to another place. There can be a risk due to fire or theft. The fear of loss of goods due to any cause act as an obstacle in the Development of trade. The insurance companies provide a coverage for all types of losses of goods. The insurance coverage has given a fillip not only to the National Trade but also to the international trade.

(viii)  Communication  : The buyer and seller at wholesale level and retail level needs the services of various agencies which communicate their message among themselves. The producer intimate to their customers about the production of goods. The intending buyers send order to the producer for supply of goods. The services of post offices, telephones, telegraph office, Telex, etc. are utilized for communicating purposes.