INTRODUCTION TO COMMERCE Lesson Note
This SS1 COMMERCE lesson note covers INTRODUCTION TO COMMERCE for First Term, Week 1.
Learning Objectives
- By the end of the lesson, students should be able to:
- Define commerce and electronic commerce (e-commerce).
- Explain the historical development of commerce from barter to modern commercial activities.
- State and explain the major features of commerce.
- Explain the scope of commerce.
- Identify and explain the major divisions of commerce.
- State and explain the functions and importance of commerce.
Lesson Note
A. Definition of Commerce
Commerce is the study and practice of the activities involved in the buying, selling, distribution and exchange of goods and services, together with the activities that make such exchanges possible.
B. Definition of Electronic Commerce (E-Commerce)
Electronic commerce, commonly called e-commerce, is the buying, selling, marketing, ordering and exchange of goods and services through electronic networks, especially the internet.
Examples of e-commerce activities include:
Buying goods through an online store.
Selling products through a website or other digital marketplace.
Online advertising and digital marketing.
C. History of Commerce
In the olden days people engage in subsistence production this means they were producing goods for themselves and their families later they started interacting with one another because it was difficult for them to meet all their daily requirements the system of exchanging goods for goods called trade by barter came into existence this became apparent in other to meet their numerous wants this was the beginning of the trading activity in the world the Arab merchant brought goods like salt ,cowries copper ,clothes and books which were exchanged for kolanut,slaves gold the initials commercial towns that served as important trading routes to the sea where badagry ,bonny ,opobo and Calabar king jaja of opobo played a great role in the development of commerce in Nigeria
D. Features of Commerce
The major features of commerce include:
economic activity: it involves the buying and selling of goods and services for the purpose of making profit
Marketing: it involves the exchange , distribution and promotion of products
It is profit-oriented: Most commercial activities are carried out by businesses with the aim of making profit, although some organizations operate mainly to provide services.
It creates employment: Many people earn their living through trading and activities that support trade.
It depends on aids to trade: Transportation, banking, insurance, communication, advertising and warehousing help commercial activities to take place efficiently.
E. Scope of Commerce
The scope of commerce refers to the range of activities covered by commerce. It includes all activities connected with trade and the services that facilitate trade.
The scope includes:
Trade – buying and selling of goods and services.
Transportation – movement of goods and people from one place to another.
Warehousing – storage and preservation of goods until they are needed.
Banking and finance – provision and management of money and credit for business activities.
Insurance – protection against certain business and commercial risks.
Communication – transmission of business information from one person or place to another.
Advertising – informing and persuading people about goods and services.
F. Division of Commerce
Commerce is broadly divided into two main branches:
i) Trade
ii) Aids to Trade
i) Trade
Trade is the buying and selling of goods and services. It is divided into home trade and foreign trade.
1. Home Trade
Home trade is the buying and selling of goods and services within the boundaries of a country. It is mainly divided into wholesale trade and retail trade.
Wholesale trade: The buying of goods in large quantities from producers and selling them to retailers or other businesses.
Retail trade: The buying of goods in smaller quantities and selling them to final consumers.
2. Foreign Trade
Foreign trade is the buying and selling of goods and services between different countries. It includes import trade, export trade and entrepôt trade.
Import trade: Buying goods and services from another country.
Export trade: Selling goods and services to another country.
Entrepôt trade: Importing goods into a country and re-exporting them, usually without substantial transformation.
ii) Aids to Trade
Aids to trade are the services and activities that make trade easier, safer and more efficient.
Transportation
Warehousing
Banking and finance
Insurance
Advertising
Communication
Tourism
Trading
G. Functions of Commerce
Commerce performs the following important functions:
1 Facilitates the exchange of goods and services between producers and consumers.
2 Makes goods available in places where they are needed.
3 Creates employment opportunities for people.
4 Encourages specialization and division of labour.
5 Improves the standard of living by making a variety of goods and services available
Evaluation
OBJECTIVE QUESTIONS
1. Commerce can best be defined as the activities involved in the ______ of goods and services.
A. production only
B. buying, selling and distribution
C. consumption only
D. manufacturing only
2. The earliest form of trade was the ______ system.
A. money
B. credit
C. barter
D. banking
3. Barter is the direct exchange of ______.
A. money for goods
B. goods for goods
C. services for money only
D. shares for goods
4. Which of the following is a feature of commerce?
A. It involves exchange
B. It prevents specialization
C. It eliminates business risks
D. It involves production only
5. One major importance of commerce is that it helps to ______.
A. prevent distribution of goods
B. connect producers with consumers
C. stop international trade
D. discourage employment
6. The scope of commerce mainly consists of ______.
A. production and consumption
B. trade and aids to trade
C. farming and fishing
D. manufacturing and mining
7. Which of the following is an aid to trade?
A. Farming
B. Mining
C. Transportation
D. Fishing
8. Commerce is divided into two major branches known as ______.
A. production and consumption
B. trade and aids to trade
C. import and export
D. wholesale and retail
9. Trade involving the buying and selling of goods within a country is called ______ trade.
A. foreign
B. international
C. home
D. entrepôt
10. Which of the following is NOT an aid to trade?
A. Insurance
B. Banking
C. Advertising
D. Manufacturing
Theory Questions
1a) Define commerce.
1b) State five features of commerce.
2a) Explain the scope of commerce.
2b) State the two major divisions of commerce.
2c) Differentiate between home trade and foreign trade.
3a) What are aids to trade?
3b) State five functions of commerce