Introduction to Commerce

Dr. S.MANIKANDAN., M.Com., M.Phil., M. Ed., Ph.D

ASSOCIATE PROFESSORPG & RESEARCH DEPT. OF COMMERCE

GURU NANAK COLLEGEVELACHERY, CHENNAI - 42

Barter system

• Barter is a system of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange

GOODS FOR GOODS

SERVICE FOR SERVICEOR

GOODS FOR SERVICE

EVOLUTION OF MARKET

FROM BARTER TO MONEY

inefficiencies of barter system 'double coincidence of wants' problem.

• GOLD & SILVER first medium of exchange

monetary system

• monetary systems developed in most countries

• money replaces Barter as the method of exchange

• money - used to intermediate the exchange of goods and services

• Medium of exchange = MONEY

TRACE OF TRADE IN INDIA

3300 BC, Northern Indiasaw the beginnings civilizations

Mohan Jo daro, and the Harappan civilization, situated along the river Indus

for the first time, humans in India used a market saw the birth of trade

Vedic Aryans Civilization

a system of structured society was formed according to occupation, into • Brahmins(learned men)• Kshtriyas(warriors, kings)• Vyshyas(Traders)• Shudras(workers).

BUSINESS

• "business" relates to the state of being busy by an individual or group of people doing commercially viable and profitable work.

• A business is an organization involved in the trade of goods, services, or both to consumers

Forms of business ownership

• Sole proprietorship•Partnership•Company

Sole proprietorship

• owned by one person for-profit

Partnership

• owned by two or more persons

Company

• has a separate legal personality from its members with limited liability.

WHAT HAPPENS IN INDUSTRY ?

PRODUCTIONEXCHANGECONSUMPTION

PRODUCTION

PRODUCTION

RAWMATERIALS

PROCESS FINISHED GOODS

PRODUCTION

RAWMATERIALS

PROCESS FINISHED GOODS

EXCHANGE

EXCHANGE

FINISHED GOODS MONEY

CONSUMPTION

FINISHED GOODS CONSUMERS

BUSINESS CYCLE

CAPITAL/INVESTMENT

RAW MATERIAL

PROCESSFINISHED GOODS

REVENUE

AIDS TO TRADE

finance transport insurance

middlemen warehousing advertisement

AIDS TO TRADE

BANKSAccepting depositsLending loans

BANKS IN INDIA

AIDS TO TRADE

TRANSPORTROADWAYS WATERWAYSAIRWAYSRAILWAYS

AIDS TO TRADE

Risk is removed againstTheftNatural calamities etc.,

AIDS TO TRADE

All goods produced cannot be sold immediatelyStored in godownsKept of future demand

AIDS TO TRADE

WHOLESALERSRETAILERSAGENTS

AIDS TO TRADE

MARKETERSAdvertisementSales promotion

COMMERCE

• Commerce includes all those activities, which directly or indirectly facilitate the exchange.

• It is exchange of goods and services

Goods – pen, notebook, clothes etc.,Services – hospital, school etc.,

COMMERCE

• BUSINESS – Both Trade and Aids to Trade• INDUSTRY – Place of manufacturing/ process• TRADE – Buying and selling of goods &

services• AIDS TO TRADE – Helpers

BUSINESS + INDUSTRY = COMMERCE

THUS COMMERCE….

Commerce

BUSINESS

INDUSTRY

TRADE

AIDS TO TRADE

Importance of trade and commerce

• tries to satisfy increasing human wants

• helps to increase our standard of living

• links producers and consumers

• generates employment opportunities

Importance of trade and commerce

• increases national income and wealth

• helps in expansion of aids to trade

• helps in growth of industrial development

• encourages international trade

TIME FOR QUESTIONS