The Difference between Trade and Commerce

Commerce and trade are both in a way related to the exchange of goods between two parties. When goods or services have been exchanged between two parties in exchange of money or something of worth, a trade has occurred.

Trade

Trade is defined as a specific subset of all the activities that occur between two parties during an exchange of goods. These activities include, but are not limited to storage, marketing, logistics, insurance and payment facilities.

The most important aspect of a trade is the exchange of money or equivalent. Without this, it cannot be called a trade.

A trade can not only be domestic but international as well. Trading between countries happens through the exchange of currency. A good example of this is forex trading through the use of analytical indicators such as non repainting forex indicator, which is essentially exchange of a currency at the cost of another currency.

Commerce

Commerce is not as simply defined as an exchange of goods and services. It is a construction of all the other activities which are associated with it like, insurance, transport, banking etc. Commerce embraces all the efforts which are mandatory for an exchange between the seller and consumer to happen for an exchange of goods.

So a commerce includes everything from cultivating a product, searching for a client, executing a trade and then reporting it to authorities for taxation.

The purpose of commerce is large, covering the entire economy, aimed at extracting financial benefits.

The main functions of commerce are the following: linking the producer and customer, removing the gap of time and place between them by facilitating exchange, create a mode of payment between buyers and sellers, providing a facility of credit, and finally making people aware of a product through advertisement.

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