In this post, we shall discuss the divisions of commerce. At the end of this lesson, students should be able to explain the divisions of commerce.
Divisions of Commerce
Commerce, as a multidimensional field of study, has various divisions that are instrumental in the movement of goods and services. There are six divisions of commerce that help facilitate economic activities. They are trade, transport and communication, banking, insurance, and advertising and warehousing.
Trade
Trade involves the exchange, buying, and selling of goods and services. It is categorized into Home Trade (domestic or internal trade) and Foreign Trade (international or external trade).
Home Trade operates within a country’s borders, while Foreign Trade involves transactions between two or more countries.
Home Trade is further subdivided into Wholesale Trade and Retail Trade, while Foreign Trade is divided into Import and Export.
Transport and Communication
Transport and Communication are crucial for the movement of goods and information from one place to another. Major means of transport include land, water, and air transport, while communication involves oral, non-verbal, and written methods.
Efficient transport and communication systems are essential for smooth commercial operations and economic development.
Banking
Banks are financial institutions established primarily for the safekeeping of money, valuable items, and important documents like wills. The presence of banks significantly boosts business activities globally.
Banks offer various financial services, including loans, deposits, and payment processing, which facilitate trade and investment.
Insurance
Insurance provides protection against various risks, ensuring individuals and businesses can recover from unexpected losses. Types of insurance include motor vehicle, fire, accident, burglary insurance, among others.
Insured individuals or entities pay premiums to insurance companies, which offer compensation in the event of covered losses.
Advertising
Advertising is a means of promoting the existence and benefits of new goods and services to the public. Various media channels like radio, television, newspapers, magazines, and digital platforms are utilized for advertising purposes.
Effective advertising campaigns create awareness, generate demand, and influence consumer choices.
Warehousing
Warehousing involves storing goods produced in advance of demand until they are needed for distribution.
Warehouses are categorized into Ordinary Warehouses (for general storage), Bonded Warehouses (for storing imported goods under customs control), and State Warehouses (managed by the government).