Importance of Commerce: Analytical Essay

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After understanding what commerce is and how the goods are made available to the consumers. What then is the importance of Commerce?

The following are some of the importance of Commerce

1. Commerce tries to satisfy increasing human wants

Human wants are never ending. They can be classified as 'Basic wants' and 'Secondary wants'. Commerce has made distribution and movement of goods possible from one part of the world to the other. Today we can buy anything produced anywhere in the world. This has in turn enabled man to satisfy his many wants thereby promoting social welfare.

2. Commerce helps to increase our standard of living

Standard of living refers to quality of life enjoyed by the members of a society. When man consumes a variety of products, his standard of living improves. To consume a variety of goods he must be able to secure them first. Commerce helps us to get what we want at right time, right place and at right price and thus helps in improving our standard of living.

3. Commerce links producers and consumers

Production is meant for ultimate consumption. Commerce makes possible to link producers and consumers through retailers and wholesalers and also through the aids to trade. Consumers get information about different goods through advertisements and salesmanship. The manufacturers are regularly informed about the likes and dislikes of the consumers through marketing research. Thus commerce creates contact between the centers of production and consumption and links them.

4. Commerce generates employment opportunities

The growth of commerce, industry and trade bring about the growth of agencies of trade such as banking, transport, warehousing, advertising, etc. These agencies need people to look after their functioning. Increase in production results in increasing demand, which further results in boosting employment opportunities. Thus development of commerce generates more and more employment opportunities for millions of people in a country.

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5. Commerce increases national income and wealth

When production increases, national income also increases. In a developed country, manufacturing industries and commerce together accounts for nearly 80% of total national income. It also helps to earn foreign exchange by way of exports and duties levied on imports. Thus, commerce increases the national income and wealth of a nation.

6. Commerce helps in expansion of aids to trade

With the growth in trade and commerce there is growing need for expansion and modernization of aids to trade. Aids to trade such as banking, communication, advertising and publicity, transport, insurance, etc., are expanded and modernized for the smooth conduct of commerce.

7. Commerce helps in growth of industrial development

Commerce looks after the smooth distribution of goods and services made available by the industry. Without commerce, industry will find it difficult to keep the pace of production. It helps to increase demand for goods on one hand and on the other hand it helps industries by getting them the necessary raw materials and other services. Hence, commerce helps in attaining better division of labour and industrial progress.

8. Commerce encourages international trade

Through commerce, we can secure a fair and equitable distribution of goods throughout the world. With the help of transport and communication development, countries can exchange their surplus commodities and earn foreign exchange, which is very useful for importing machinery and sophisticated technology. It ensures faster economic growth of the country.

9. Commerce benefits underdeveloped countries

Underdeveloped countries can import skilled labour and technical know-how from developed countries, while the advanced countries can import raw materials from underdeveloped countries. This helps in laying down the seeds of industrialization in underdeveloped countries.

10. Commerce helps during emergencies

During emergencies like floods, earthquakes and wars, commerce helps in reaching the essential requirements like foodstuff, medicines and relief measures to the affected areas.


  1. Matimba A (2009), Distinction in commerce, self (A. Matimba), Livingstone, Zambia.
  2. Wokorach J.B (1999), A complete course, 3th edition, Salama publishers, Bostwana
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