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Discover what commerce is, why it's vital, how it's divided into branches, and the main business types involved.


What is Commerce?

The global economy depends on commerce. Everything about buying, selling & disposing of products and services at wholesale and retail levels is included in commerce.

The exchange of products and services between two or more entities is commerce. Typically, it entails purchasing and selling valuable goods or services. The three parties involved in trade can be consumers, businesses, or both.

Value is exchanged in commerce, and one of the parties frequently makes money from the transaction. 

It also encompasses the services offered by businesses and other organizations that support the exchange of goods and services.

Our society benefits from commerce in five key ways.

  1. The needs and wants of individuals are met via commerce.
  2. Commerce links producers and consumers.
  3. Commerce raises people’s living standards.
  4. Workplace opportunities are produced through commerce.
  5. Profits are generated by trade.

Recognize that commerce is a part of what we call business, not the same thing. 

Without mentioning the manufacturing or production processes, commerce also encompasses the distribution of items made by manufacturers.

What is it meant to be in the commerce business?

  • The exchange of products and services, frequently for a profit, is commerce.
  • Trade and trade-related assistance are the two subfields of commerce.
  • There are two types of trade: internal (inside a nation’s boundaries) and foreign (between countries)
  • Transport, warehousing, distribution, advertising, insurance, and banking are all examples of trade facilitation.
  • There are seven main business models for commerce: B2A, C2A, C2C, C2B, DTC, B2C, and B2B

Branches of Commerce

Trade and everything that supports trade are the two main pillars of commerce. Multiple sub-branches characterize each branch within each branch.


Trade refers to any transaction in which two or more parties exchange or sell products and services. 

Trade can be divided into two categories: internal and external.

Internal trade is the trade that occurs entirely within the boundaries of one nation. Internal trade can be made by either wholesale or retail:

Wholesale or retail sales can be made through these internal sales:

  • When a retailer purchases a product from a manufacturer to resell to consumers, wholesale trade occurs.
  • The sale of goods from retailers to final customers is known as retail trade.

Trade between entities in different nations is called “external trade.” 

For instance, foreign commerce occurs when a factory in the United States purchases components from a producer in China.

Three categories of external trading exist:

  • The term “import” refers to acquiring products from another country.
  • The sale of goods to another country is referred to as an export.
  • Buying commodities from one country to sell them to a third country is known as an entrepot.

Functions that support trade

All actions that facilitate commerce are considered to support functions for trade. These consist of the following: shipping, storage, distribution, marketing, insurance, and banking.

Transport involves carrying items from one place to another, whether finished goods from a merchant to a consumer or raw materials from a supplier to a manufacturer.

Before being sold and delivered to a different company, products are stored in warehouses. When products are sold from one party to another, distribution takes place. Manufacturers distribute to wholesalers, who then distribute to retailers, who then distribute to customers.

Advertising is used to inform consumers about the products and services vendors have to offer and persuade them to purchase those products and services.

Some of the hazards connected with the trading process are reduced through insurance. Banking provides the cash necessary for a business to operate and closes the gap between when an item is made and purchased.

Different business models in the current market

There are various forms of commerce. One commerce involves businesses buying from other companies, while another involves consumers buying from businesses. 

As explained below, we have identified seven main business models for commerce today. These business strategies are available offline and online through e-commerce platforms. 

Additionally, some of these business models can be integrated to build a supply chain that extends from the point of manufacturing to the final consumer.


The business-to-consumer (B2C) business model is undoubtedly the most well-known. It describes any situation in which a company sells a customer a good or service. Any physical store, as well as online retailers like Amazon, are examples of B2C trade.


Business-to-business (B2B) trade occurs when one company sells goods or services to another company. In business-to-business (B2B) transactions, the company making the purchase frequently resells the goods or services to customers, forming a B2B2C chain.


A company engages in business-to-administration (B2A) commerce when it sells a good or service to a regional, national, or international governmental organization. B2G, or business-to-government, is another name for B2A commerce.


People may also offer their goods or services to the government. 

Consumer-to-administration (C2A) commerce is what is used when this happens.


Individual consumers frequently sell goods and services to other consumers. Consumer-to-consumer (C2C) commerce, as shown by transactions made possible utilizing internet markets like Craigslist and eBay.


Consumer-to-business (C2B) commerce is the sale of goods or services by an individual consumer to a business or other provision of value to a company. 

Payments made to the customer are not required in C2B trade. 

C2B commerce, for instance, involves a consumer participating in a focus group for a company.


A direct-to-consumer (D2C) business model is employed in commerce where a client buys an item or service directly from a manufacturer rather than a retailer. Direct-to-consumer (DTC) trade generally eliminates the middleman in this situation.

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