What is the Difference between Trade and Commerce?

Business Activities are grouped into two broad categories, i.e. industry and commerce. Commerce is concerned with facilitating the exchange of goods and services in the economy. It is sub-classified as trade and auxiliaries to trade. Many think that trade and commerce are the same terms and can be used interchangeably. But the fact is both the terms are different from each other and carry different meanings. Trade simply means buying and selling of goods and services in return for money or money’s worth.

Both modes have their own merits and demerits, here, the students can learn the meaning of Trade and Commerce.

Trade

The possession of goods or services is given from one person to the another in payment of cash or cash equivalents. Trade can be performed between 2 parties or more than 2 parties. When the purchasing and selling take place between 2 people, it is known as bilateral trade. Whereas when it is done between more than 2 persons, then it is known as multilateral trade.

Commerce

Commerce involves all the activities that aid in promoting the exchange of goods and services from the manufacturer to the last customers. Primarily, the activities are banking, transportation, advertising, warehousing, insurance, etc., that act as an aid in the successful achievement of the exchange.

This article is a ready reckoner for the students to learn the comparison between Trade vs Commerce.

Comparison Table

BASIS TRADE COMMERCE
Meaning The possession of goods or services is given from one person to the another in payment of cash or cash equivalents. Trade can be performed between 2 parties or more than 2 parties. Commerce involves all the activities that aid in promoting the exchange of goods and services from the manufacturer to the last customers. Primarily, the activities are banking, transportation, advertising, warehousing, insurance, etc.,
Scope Narrow Broad
Type of Activity Social Economic
Association Between the buyer and seller Between the manufacturer and customer
Capital requirement More Less
Frequency of Transactions Isolated Regular

The above mentioned is the concept, that is elucidated in detail about ‘Difference between Trade and Commerce’ for the Commerce students. To know more, stay tuned to BYJU’S.