What is Commerce

Commerce Meanings

What is Commerce?

Trade is called any negotiation that involves the purchase, sale or exchange of products, goods or services . It comes from the Latin commercĭum, which means ‘purchase and sale of merchandise’.

In this sense, trade can also be called the set of negotiations that are part of this process.

Likewise, it can also refer to the store or establishment where this type of negotiations take place, as well as the area of ​​a town or city where this type of transaction is mostly recorded: “We go to the city’s trade area.”

Likewise, as trade, the class or group of people dedicated to commercial activity is designated : “the trade manifested itself in favor of the new measures.”

Formal and informal trade

There are two basic types of commerce, which are distinguished from each other by whether or not they are subject to the legal statutes in force in commercial matters: formal commerce and informal commerce.

The informal trade is all that an individual place outside the formal structures of the State, evading the payment of taxes and other legal formalities. The most common example of informal trade is that of street vendors, but also that referring to illicit businesses, such as the sale of prohibited drugs or the trade in parts resulting from theft or theft.

For its part, formal trade includes that regulated by the State in the commercial code, subject to current legal regulations, and declared regularly before the competent tax agencies. The importance of formal trade is that it has the ability to boost a country’s economy, energize it, diversify it, and produce wealth for its citizens.

Fair Trade

Fair trade is a system that is based on a voluntary, ethical, respectful and fair commercial relationship between producers and consumers.

It promotes greater equity in international trade, that is: the right of producers to have better commercial conditions, as well as the right of workers to have an adequate share of profits and better social conditions; enhances the economic position of small producers and owners (especially those belonging to developing countries), with the aim of avoiding their marginalization from the world economy; all adjusted to the corresponding legal framework, with decent working conditions, and under a framework of environmental policies and sustainable development.

In this sense, fair trade seeks to change the conventional rules and habits of international trade towards more fair and equitable practices, for this reason, it is promoted by non-governmental organizations, social and political movements, and even by the United Nations Organization.

Foreign trade

Foreign trade is called the set of commercial transactions, based on the exchange of products, goods and services, from one State to another or other States . This type of relationship can be export (sell) or import (buy).

Foreign trade favors the generation of wealth from exports, as well as the satisfaction of internal needs in the purchase of products, goods or services that can supply or meet demands in the domestic market.

As such, foreign trade is subject to a series of international standards, treaties, conventions and agreements, which comprise a set of procedures and regulations related to import or export exchanges.

Internal trade

As internal or internal trade is called that which involves the set of commercial transactions, related to sale, purchase and exchange of goods and services, which is carried out between citizens and companies that are within the limits of the same State and that, in Consequently, they are subject to the same legal regulations.

It is divided into national internal trade, which includes all the commercial transactions that are registered within the country in question, and local internal trade, which is the one related to commercial operations that are carried out only within a specific locality.

Electronic commerce

Electronic commerce, digital commerce or e-commerce , refers to that type of transaction between people and companies that involves the purchase, sale or exchange of products, goods or services, which is carried out through computer networks, mainly the Internet, and whose payment system is also electronic, more usually by credit card.

What is Commerce