Commerce Explained: Characteristics, Impact & Trade Types

Understanding Commerce

General Characteristics

Commerce includes all economic activities intended to connect producers and consumers through the buying and selling of goods and services.

Some characteristic features of commerce today include:

• It is governed by the principles of supply and demand.
• In terms of location, it is physically concentrated primarily in urban environments. It is also closely related to and dependent on transport and communications networks.
• Countries are becoming increasingly interdependent. Multinational companies are also increasingly important in international trade.
• In developed economies, the growth of commerce is based on consumption by consumers, inhabitants, and companies, and the significant production of goods and services.
• In developing economies, there is a mixture of high-level and low-level commercial transactions that range from international business deals between multinationals to street vending.
• It is reinforced through marketing, which includes a number of practices intended to stimulate consumption. These include advertising, image building, communications campaigns, etc.
• It promotes new types of business, such as electronic commerce or e-commerce. This involves buying goods and services from distributors, large retailers, or traditional shops via the Internet using devices such as computers, tablets, and smartphones.

Companies, especially large ones, invest considerable amounts of money in marketing in order to compete in increasingly saturated markets.

Commerce and Its Effect on Geographic Space

The close relationship between commercial activity, cities, transport, and communications networks has played a powerful role in transforming the landscape on the outskirts of urban areas. This is where industrial estates and elements of infrastructure are located, along with large retail spaces.

The growing number of spaces devoted to commerce and the need to improve links and speed up trade has led to the creation of distribution or logistics centres, enormous warehouses for goods, and logistics platforms. Like industrial estates, these are large planned areas, but for commercial use only, and they are connected to road and rail networks, as well as airports. Along with transport and telecommunications, these commercial spaces extend the impact of commerce from the cities out into the surrounding area.

Domestic Trade Explained

Domestic trade takes place within the borders of a country. These exchanges can be divided into two basic groups:

• Wholesale trade, which moves large quantities of merchandise in order to sell it to other merchants or companies.
• Retail trade, which involves buying from wholesalers and selling directly to consumers.

Products are sold in establishments, which can be classified into different categories and types based on their size and specialisation.