1. Commerce includes not only trade but also services such as transport, warehousing, packaging, insurance, banking and sales promotion which are incidental or auxiliaries to trade.
2. Trade: The term trade is used to denote buying and selling. Therefore who buys and sells is a trader. A trader is a middleman between the producer and the consumer.
3. Transportation: Goods produced are to be sent to different places where they are demanded. It is done by transporting.
4. Banking: To start the business or to run it smoothly, we need money. Banks supply money in the form of loan. Business activities cannot be undertaken unless funds are available. The funds can be obtained from the bank.
5. Insurance: Business involves many types of risks. Factory building, machinery, furniture must be protected against fire, theft and other risks. Employees are also protected against the risk of accident. Insurance provides protection in all such cases.
6. Warehousing: Usually goods are not sold or consumed immediately after the production. They are to be kept in stock to make them available as and when required. Warehousing helps the firms to overcome the problem of storage and stores the goods for future usage.
