Q. Discuss the importance of Commerce in the present time?
Ans – Commercial activities consist of all such activities
that are required for bringing goods to the hands of the ultimate consumer. The
basic aim of commerce is to ensure the supply of goods at the right place, in
proper quantities and at the time when they are demanded.
In light of the above statement the importance of commerce
in the present time can be enumerated as follows –
1.
Transport – Transport refers to the conveyance
of goods and passengers from one place to another. It facilitates trade by
assembling and distributing goods. Goods are produced and consumed at another
place. Transport brings the goods from the place of production to all the far
and distant places of consumption. It helps the consumers in getting a wide
variety of goods at reasonable prices. Trade overcomes the barrier of distance
and hence creates place utility. Transport widens the market and helps to
equalize prices at different places. Thus, transport has become the lifeline of
modern industry and trade.
2.
Warehousing – Now-a-days goods are produced in
anticipation of demand. It is, therefore, necessary to store the goods until
they are sold. Many products such as wheat, sugar, rice, etc. are produced in a
particular season but they are needed throughout the year. Besides, it is necessary
to store goods like woolen garments and umbrellas to meet the desired seasonal
demand. Warehousing removes the hindrance of time and thereby creates time
utility. It helps to stabilize prices through equal distribution of surpluses
over different time periods.
3.
Insurance – Business involves several types of
risk, e.g. risks arising from price fluctuations, dishonesty of employees, bad
debts, loss of goods in transit, natural calamities, etc. Insurance removes the hindrance of risk. With
the help of insurance, businessman can protect himself from several types of
risk. A large number of people who are subject to a particular type of risk
contribute to common fund, out of which compensation is paid to those few who
actually suffer the loss. In this way the amount of risk borne by an individual
businessman is reduced by distributing the burden of loss over a large number
of persons. There are various types of insurances covering specific losses,
e.g. fire insurance, marine insurance, theft insurance, life insurance, workmen’s
compensation insurance, etc.
4.
Banking and finance – There is usually a time
gap between production or purchase of and sale of goods. It takes time to
collect money after sale of goods on credit. During this period, businessman
needs finance to carry on their business activities. Banks and other financial
institutions provide funds and credit to businessman. Production and
distribution of goods and services on a large scale requires a huge amount of
money at low rates of interest. Banks facilitates large scale and efficient
business operations by providing loans.
5.
Advertising and Publicity – Advertising brings
goods and services to the knowledge of prospective buyers. It helps to
highlight the distinctive features and utility of different products. With the
help of such knowledge, consumers can obtain better value for their money. Publicity
helps to boost the sales of the product and services through seasonal sale,
discounts, celebrity endorsements, etc.
6.
Communication – Quick and reliable means of
communication are essential for efficient operation of commercial activities –
Postage, courier service, telephone, internet, etc. provide vital means of
communication for commerce and industry.