Functions of Commerce
The following are the important roles commerce performs in a country’s economy;
1. Exchange of Goods and Services:
This is the most important role commerce plays, the fact that it facilities the buying and selling of goods and services, thereby enhancing exchange between the producers, sellers, and the final consumers. This is achieved through effective communication, advertisement, improved transportation, insurance, and banking services among others.
2. Stimulation of Demand:
Commerce plays the role of increasing demand through effective advertising strategy which helps to expand the market for local and international products.
3. Large Scale Production:
Commerce helps to encourage mass or large-scale production of goods both at the local and foreign levels, hence there is an expansion of the market or the products.
4. Provision of Funds:
Banks and other financial institutions play important roles in the provision of funds for investors, merchants, businessmen entrepreneurs in form of short and long-term loans. This helps to promote the growth or expansion of commerce in any economy around the world.
5. Effective Distribution:
Equitable Distribution and supply of goods in and around the world are ensured through commerce. It helps products to be made available where they are needed thereby preventing scarcity and fluctuation in the prices of goods.
6. Risks Minimization:
Insurance helps to cover all forms of losses both physical and financial that may occur in businesses thereby ensuring rapid growth in the world market.
7. Mobility of Products, Materials, and Labour:
Commerce ensures the effective mobility of products (raw materials, semi-finished and finished products), other materials and equipment needed for production, distribution, and labour, to the various strategic areas of the economy through transportation.
8. Transfer of Information:
Commerce aids the receiving and giving out of business and non-business information which is vital to human existence. Trade is promoted globally through the dissemination of information, that is both oral and written.
9. Storage Function:
Goods are produced ahead of demand and prices are stabilized through the use of warehousing activities. Producers are encouraged to be in production thereby making goods available at all times without allowing much fluctuation in the prices of seasonal goods.
10. Creation of Public Awareness:
An effective and successful advertisement helps to provide necessary information about companies’ products and services to the member of the public. Also, basic information on the benefits and use of the products, prices, and places where they can be obtained are made available through advertisement.