IV. Read the text and check up your answers in ex. III.

Commerce is concerned with the distribution of all kinds – raw materials, foodstuffs, manufactured goods. And I have to say that the business of distribution has become very complex nowadays.

There are four main branches of commerce.

The first one is called the retail trade. For example, when you want to buy something, you go to a person or a shop that sell the products you want, then you make your choice and buy the good. This is a simple example of transaction between consumers and retailers.

The second branch is when retailers buy goods from wholesalers, or the wholesalers – from manufacturers. It’s called the wholesale trade. For the retailers it means lower prices because they buy in large quantities and thus reduce their costs. The wholesalers, in turn, get the goods from manufacturers, and the quantity is much bigger. So they have very larger discounts.

Importing of goods from abroad and selling them to local companies is connected with the third branch of commerce. For example, a company produces cars in the USA and sells them in Europe. This company needs an agent who can represent it in their own country. This agent, in turn, should have a warehouse where they can keep the cars before they have been sold. Sometimes they sell the cars themselves.

The fourth branch of commerce is related to the export trade. Sometimes one country cannot sell all its products at home and it needs a representative who can sell them abroad, or exporter.

Well, in general the four branches of commerce are concerned with buying and selling of goods, and represent different kinds of trade. In this way, trade is the basic commercial activity, while commerce is much more than trade.

To carry out trade you should also have some services, one of which is transport. Transportation helps to move goods from one place to another, and if it’s efficient and developed, then you’ll have fewer problems with home and foreign trade. Transport is vital to trade, so it forms an important branch of commerce.

There are also financial services which are important to commerce. For example, banking and insurance. Without them you won’t have money for your business and you may bear losses if your goods haven’t been insured.

Advertising is also important because it stimulates sales, and then it’s easier for everybody to conduct trade.

The four kinds of trade, together with transport, banking, insurance and advertising, form the main divisions of commerce. And to know and understand them is very important for those, who want to connect their lives with commerce.

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