Difference Between Business, Commerce, and Trade – Easy Notes-22



Business Organisation

Difference Between Business, Commerce, and Trade


The term business is derived from the word ‘busy’. Thus, business means being busy. However, in a specific sense, business refers to an occupation in which people regularly
engage in activities related to the purchase, production, and/or sale of goods and services with a view to earning profits.


Commerce includes two types of activities, viz., (i) trade and (ii) auxiliaries to trade. Buying and selling of goods are termed trade. But there are a lot of activities that are required to facilitate the purchase and sale of goods.

These are called services or auxiliaries to trade and include transport, banking, insurance, communication, advertisement, packaging, and warehousing. Commerce, therefore, includes both, buying and selling of goods, i.e., trade, as well as, auxiliaries, such as transport, banking, etc.

Commerces provides the necessary link between producers and consumers. It embraces all those activities, which are necessary for maintaining a free flow of goods and services.


Trade is an essential part of commerce. It refers to the sale, transfer, or exchange of goods either physical or virtual. It helps in making the goods produced available to consumers or users. These days’ goods are produced on a large scale and it is difficult for producers to themselves reach out to individual buyers for selling their products.

Activities that are meant for assisting trades are known as auxiliaries to trade. These activities are generally referred to as services because these are in they nature of facilitating the activities relating to industry and trade.

Difference Between Business, Commerce, and Trade

Difference Between Business, Commerce, and Trade


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