Question

Difference between commerce and industry

Answer 1

Economic activities associated with the procurement or extraction of raw materials and converting them into finished products which reach the final customer is known as an industry. The term ‘industry’ is used to denote those activities which involve the use of mechanical appliances and technical skills, i.e. activities with the manufacturing, production, and processing of products. It indicates the supply side of the market. The activities covered under industry are as under:

Extraction of materials such as coal, petroleum etc.
Conversion of raw materials into useful goods like soaps, fans, cement, etc.
Construction of buildings, dams, roads etc.
The industry represents a group of factories, specialized in a specific product line. The different types of industries are as under:

Primary Industry: Industry concerned with obtaining and providing natural raw materials like mining, agriculture or forestry.
Secondary Industry: Industry engaged in conversion activities, i.e. converting raw material provided by primary industry, into finished products.
Tertiary Industry: Industry that provides support services to the primary and secondary industry.

The term ‘commerce’ means a business activity that involves buying and selling of goods or services for value (cash or kind) and that too, on a large scale, between businesses or entities, from one place to another. When there is a purchase or sale of a particular item, it is known as a transaction, but commerce refers to all the transactions associated with the buying and selling of that item in an economy.

All the economic activities which are in some way or the other related to exchange comes under commerce. It covers the distribution aspect of business, i.e. it facilitates consumption process by providing proper distribution channel. Therefore, it ensures the availability of goods and services to the customers, at the right time and place. It is broadly classified into two activities:

Trade: The process of buying and selling of goods and services for money.
Auxiliaries to trade: All the activities which assist trade directly or indirectly are auxiliaries to trade. It includes transportation, warehousing, banking & finance, advertising, insurance and so on.