Functions Of Commerce Or Scope Of Commerce
Functions Of Commerce Or Scope Of Commerce
Saturday, June 13, 2020
FUNCTIONS / SCOPE OF COMMERCE The commerce has a wider scope. In case of home trade, the wholesalers, retailers and other middlemen connect the actual producers on one hand and the ultimate consumers on the other hand. Various closely related activities of commerce such as transport, warehousing, insurance, banking and finance in short all the functions of commerce are included in the scope of commerce.
PRODUCTION: Business function starts with the planning for production, which is conversion of materials from one from to another. It requires the purchase of raw materials, machinery and equipment and hiring different classes of laborers. Production, which is a commercial activity, has four factors land, labor, capital and entrepreneurship without which it cannot take place.
BANKING FINANCE: Banking and finance are part of commerce. By performing this service, commerce is able to finance the needs of the business firms. Through banking producers and middlemen get the needed funds. Bank helps businessmen in foreign trade by issuing drafts, L/Cs, and discounting bills of exchange.
INSURANCE (RISK): Risk is inherent to business. Business risks include theft, fire, and change in prices, government policies and restrictions, strikes, change in fashion, changing taste of consumers. Risk may be classified as: A: Insurable risks. B: Uninsurable risks. Those risks, which can be covered under an insurance policy, are referred to insurable risks and initial theft, fire and sea hazards.
STORING/ WAREHOUSING: Warehousing may also be referred to as the process of storing the main objective of which is to hold goods for safety till the time they are sold. On the other hand, warehousing is the stores or place where goods are kept for safety. There are various kinds of warehousing, public warehouse, private warehouse, and cold storage
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PRODUCTION: Business function starts with the planning for production, which is conversion of materials from one from to another. It requires the purchase of raw materials, machinery and equipment and hiring different classes of laborers. Production, which is a commercial activity, has four factors land, labor, capital and entrepreneurship without which it cannot take place.
BANKING FINANCE: Banking and finance are part of commerce. By performing this service, commerce is able to finance the needs of the business firms. Through banking producers and middlemen get the needed funds. Bank helps businessmen in foreign trade by issuing drafts, L/Cs, and discounting bills of exchange.
INSURANCE (RISK): Risk is inherent to business. Business risks include theft, fire, and change in prices, government policies and restrictions, strikes, change in fashion, changing taste of consumers. Risk may be classified as: A: Insurable risks. B: Uninsurable risks. Those risks, which can be covered under an insurance policy, are referred to insurable risks and initial theft, fire and sea hazards.
STORING/ WAREHOUSING: Warehousing may also be referred to as the process of storing the main objective of which is to hold goods for safety till the time they are sold. On the other hand, warehousing is the stores or place where goods are kept for safety. There are various kinds of warehousing, public warehouse, private warehouse, and cold storage
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TRANSPORTATION: Transporting is so as important activity that no business can be performed without it. It refers to moving goods from the point of production to the point of consumption. It helps the producer dispose of their goods to the far and needy markets. It creates place utility. Quick and modern means of transport have made possible to send goods in any part of the globe in a very short period.
INFORMATION: Commerce requires information at every stage. In production, in buying, in selling, and in research one needs exact and latest information. Well – informed businessman is more successful than a uniformed person. Information activity of commerce also includes advertising without which major business activity cannot be successful.
TRADE (BUYING & SELLING): Trade has a pivotal role in business. Trade refers to buying and selling. It also covers imports, exports, retailing, wholesaling and brokerage. Business and trade are compulsory to each other. Infect trade is a branch of the business. Business requires acumen of the businessman. Before buying he has to take in to account quality, variety, price, design, and term of sales, guarantee and services offered by the sellers. In selling, he has to locate customer, advertise his products, determine channel of production, prepare promotional material and fix selling prices. He must also be aware of customer’s trade, trends and preferences
INFORMATION: Commerce requires information at every stage. In production, in buying, in selling, and in research one needs exact and latest information. Well – informed businessman is more successful than a uniformed person. Information activity of commerce also includes advertising without which major business activity cannot be successful.
TRADE (BUYING & SELLING): Trade has a pivotal role in business. Trade refers to buying and selling. It also covers imports, exports, retailing, wholesaling and brokerage. Business and trade are compulsory to each other. Infect trade is a branch of the business. Business requires acumen of the businessman. Before buying he has to take in to account quality, variety, price, design, and term of sales, guarantee and services offered by the sellers. In selling, he has to locate customer, advertise his products, determine channel of production, prepare promotional material and fix selling prices. He must also be aware of customer’s trade, trends and preferences
