Introduction to commerce

Commerce is the study of trade and aids to trade. It is concerned with the exchange of goods and services and the agencies that facilitate the exchanges.

Branches of Commerce

There are two branches of commerce: Trade and Aids to Trade.

Trade refers to the act of buying and selling of goods and services.  Aids to trade refer to the other activities that help facilitate trade.

The Importance of Commerce

1. Commerce serves as a link between manufacturers, wholesalers and retailers
2. Provides employment
3. Creates awareness of goods and services through advertising
4. Enhances a good banking system
5. Revenue for the government
6. Creates the need for road improvement and infrastructure which lead to development of economy
7. Minimizes risk in business through agencies of insurance
8. Encouraged friendship and international cooperation between nation

Activities that Aid Trade/Aids to Trade

There are various services which facilitate trade. These services are known as Aids to trade. These are:

1. Banking: Banking Services are provided by an institution set-up to help business transactions. Such banking services are:

(i) Providing business with capital: Capital is the money a businessman needs to enable him carry on his business.

(ii) Accepting money as deposits: Bank accepts to keep money made out of business safely until it is needed for business transaction.

(iii) Helping business to transfer money: Banks help business to transfer money from one place to another.

2. Insurance:This is a measure taken to safeguard against risk of life or property. The insurance company is called the insurer while the person taking out the policy is called the insured. There are insurance coverage for fire hazards, theft of goods, goods under shipment and goods in the warehouse. In the event of any risk the insured will be indemnified (i.e. compensated the insured for the loss).
3. Communication:This is the passing of information from one person to another. Buying and selling of goods requires communication between two or more persons. To facilitate communication between the sellers and the buyers, there are organizations which provide aid to both parties. The Nigerian postal services (NIPOST) and the Nigerian Telecommunication Limited (NITEL) and Courier Organizations such as United Parcel Services (UPS) provide communication services to business.
4. Advertising:This is the creating of awareness of the existence of new and old goods. This is done through the following means of advertising: Newspaper, magazines, radio, television, bill boards etc.
5. Warehousing:This is the act of storing goods in a warehouse until they are needed. Goods are sometimes stored for future use. This storage function is performed by the warehouse.
6. Transportation:This is carrying of goods and persons from one place to another by land, air and sea. Transport helps persons and goods to reach where they are needed.