Reviewed by Anjaneyulu | Updated on Sep 14, 2021



Commerce is the exchange of goods and services, especially on a large scale. It includes economic, legal, political, social, cultural, and technological processes operating in a country or international trade.

Commerce in the economic sense refers to the conduct of trade between economic agents. It generally affects the well-being and welfare of citizens and residents and has a direct impact on the money people have and their employment opportunities. The term trade may also apply to the regional or cross-border buying and sale of goods between governments and between businesses.

Commerce & Trade

Many scholars and ancient philosophers have understood how to combine the words "commerce" with "trade". But in fact, these two are distinct concepts with different meanings.

Trade means the selling and purchase of items for money or anything of value. Commerce encompasses a much wider field and involves trade, along with the services that promote such purchase and sale of goods. These can include insurance, warehousing, transport, and advertising services.


In addition to traditional self-sufficiency, trading became the key facility of prehistoric people who exchanged what they had for goods and services from one another. The barter system was common in ancient times when goods and services could be acquired by offering some other goods and services to the other person according to their needs, rather than paying through monetary systems.

The credit for the history of long-distance trade can be dated back to 150,000 years with the historians—Peter Watson and Ramesh Manickam. Roman trade included routes through the Mediterranean from and to India.


Trade is a significant component of commerce. It applies only to the direct purchase and sale of products. Trade covers all trade-related activities such as:

  • Insurance: Protects goods from theft, burning, any human or natural disaster as stipulated beforehand.

  • Banking: Relates to financing transactions.

  • Warehousing: Focuses on storage-related issues such as maintaining products in a safe place such as a "warehouse" until they are sold to consumers.

  • Transportation: This entails moving goods from their place of production to their actual point of sale.

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