Table of Contents:
1. Business And Commerce
We often come across words like ‘Commerce’ and ‘Business’ in our day-to-day lives. Most of us don’t think of them as different terminologies, and therefore, we often use them interchangeably as per our requirements and comfort. These words are closely related to one another, but they cover different aspects when we study them from different viewpoints.
By definition, commerce refers to the process of buying and selling products and services. These products or services have a specific value in the market, and they get exchanged between two entities in return for something valuable, like money. In this blog we cover the major aspects of difference between commerce and business.
2. Distinguish Between Business And Commerce
Business, on the other hand, refers to the process through which a person or company makes a profit. It involves buying and selling of goods/services, but it also involves other things like management of raw materials, handling of various processes, and financial aspects.
Therefore, we can say that business is a wider concept, whereas commerce is just a part or a subset of it. However, it is not as simple as this. Therefore, let’s differentiate them on the basis of some other factors and viewpoints to properly define the difference between business and commerce:
3. Difference Between E-Business and E-Commerce
Like business and commerce are two different words with different meanings, ‘E-Business’ and ‘E-Commerce’ are also entirely different concepts. For example, when we say that someone is using an e-commerce website to run their business, we mean that they are using e-commerce as a tool to enhance their profits in business. However, their business may not be entirely dependent on e-commerce.
Therefore, we can say that e-commerce is simply buying and selling goods/services electronically. E-Business refers to a business that takes place electronically, i.e., every process is technology-driven. It will be hard to find businesses that are entirely tech-based. However, it will be easy if we understand it with the help of an example. For instance, the owner of your company processes salary and attendance online. This means that these processes are conducted electronically and are, therefore, a part of your company’s e-business.
4. Primary Difference Between Business, Commerce And Trade
By the basic definition, you will see that trade and commerce are two different names of the same term. However, there are many differences here, as well. Trade happens between two parties, i.e., a buyer and a seller, whereas commerce connects a manufacturer to the end-user. For example, to sell a product to a customer, a company has to store it in a warehouse, transport it to the nearest sales point, and only after that, the customer gets to buy that product from the market.
It involves many other processes, as well. From this, we can conclude that where commerce is a subset of business, trade is a subset of commerce. In simple words, everything that is needed to buy or sell a product comes under commerce. Also, everything that is needed to manufacture, sell, and take care of the processes that handle these activities comes under business.
1- Activities Involved
As we have already mentioned, commerce involves only buying and selling, whereas business involves much more. It involves activities like planning, marketing, distributing, accounting, supervising, maintenance, and many more. However, commerce is involved in each of these activities as well. For example, for handling the accounts of your company, you will need a professional who has expertise in accounting.
In exchange, you will offer him a salary. In layman’s terms, the accountant has sold his service to you in exchange for a salary. Similarly, for marketing, you will need a marketer who is well-versed in marketing-related activities. In return, you may offer him a salary or a percentage of your online sales. Also, you may offer an incentive to a salesperson in exchange for each sale. All these activities are commercial in nature, but they all fall under the larger process called business.
The motive, i.e., the basic purpose of commerce, is to generate revenue for a company or entrepreneur. The purpose of business is wider as a business needs to take care of the processes that ensure smoothing functioning of various activities, including finance, marketing, and selling.
5. Difference Between Business And Commerce: Types.
Commerce does not have any type because it is an end-to-end process in itself. However, it can be separated into trade and other activities that assist trading. On the other hand, business has many types according to its structure and the way in which it is conducted. For example, a business can be a partnership between two or more individuals, or it can be a sole proprietorship. Moreover, it can be operated by a trust, or it can be a company where everyone is assigned with some tasks.
1- Capital Requirement
As business takes care of everything from manufacturing to distributing, and from advertising to selling, it requires a huge capital or investment. Commerce is the transfer of products or services in exchange for something of value. It is trading done on a large scale but requires less capital as it does not take care of other activities like advertising and management. As the capital requirement is high, the risk involved in running a business is also much higher as compared to the risks involved in handling the commerce part of a business.
2- Bachelor Of Business v/s Bachelor Of Commerce
Bachelor of Business imparts knowledge on various business skills and practices to a candidate. It gives practical knowledge to you in various areas like project management, leadership skills, product management, marketing, and communication skills. It encompasses various other areas as well. Therefore, we can say that a Bachelor of Business course trains you to be a leader, an entrepreneur, or a wise strategist who holds expertise in multiple aspects of the business.
Bachelor of Commerce gives you knowledge about specific functions that are carried out by a business. For example, it gives you knowledge about accounting, human resource management, economics, etc. This means that it will be ideal if you want to achieve higher credentials in economics, accounting, or finance in the future. Therefore, you will see that most candidates who want to be a CA (chartered accountant) will undertake this course.
6. Key Takeaways
Though commerce and business are categorically different, they are even closely related to each other. You cannot imagine a business without its commercial activities, and, similarly, commerce or commercial activities cannot exist without a business that needs them. Hence, it's crucially important to analyse the difference between commerce and business. Therefore, while understanding their major differences, you must also grasp the finer nuances that link them together.
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7. FAQs On Difference Between Business And Commerce
Q. What is the difference between business and commerce?
Ans- Business involves the production and transfer of goods and services while Commerce mainly concerns the distribution of things and services.
Q. What are the types of commerce?
Ans- Some of the existing types of e-commerce are:
- B2A (Business-To-Administration)
- C2A (Consumer-To-Administration)
- B2C (Business-To-Consumer)
- B2B (Business-To-Business)
- C2C (Consumer-To-Consumer)
- C2B (Consumer-To-Business)
Q. What is the meaning of business and commerce?
Ans- Commerce indicates the purchasing and sale of goods and services for cash or in kind. It is a section or division of the business. Commerce can also be called Trade.
Q. What are the 3 types of e-commerce?
Ans- The 3 main types of e-commerce are:
- B2C (Business-To-Consumer)
- B2B (Business-To-Business)
- C2C (Consumer-To-Consumer)
Q. Are trade and commerce different activities?
Ans: No. Both trade and commerce involve the same activities, but trade is only an exchange of products/services for money, whereas commerce takes care of the entire buying and selling process.
Q. How can commerce be classified?
Ans: Commerce can be further classified into trade and other activities that facilitate smooth trading.
Q. Should I opt for a career in commerce or business?
Ans: If you want to be an entrepreneur, then you may opt for courses that are business-oriented, whereas if you want to become an expert in a specific business-related field, then you can opt for commerce-related courses.
Q. Will becoming a commerce expert give me leadership skills?
Ans: You might be born with leadership skills, but commerce-related courses are more focused on training you on the commercial part of the business. The practical skills and leadership qualities required to run a business are offered largely by business-related courses.
Q. Is there any similarity between industry and business?
Ans: Industry refers to the wider aspect that may include various businesses or other platforms that are required to support a business. Though similar in function, business is a subset of industry.
Q. Can I run an e-commerce portal without business?
Ans: No. If you are a distributor who just buys something and sells it at a higher cost, then also you will need marketing, advertising, and other processes that are required to support your commerce. This makes you a businessman/businesswoman.
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