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Industry and commerce are part of the topic of nature and purpose of business. Industry and commerce talk about the two kinds of business activities in an economy. The industry is a business activity where you convert raw materials into products; they involve production and processing. On the other hand, commerce is a business activity where the goods are directly or indirectly distributed to the final consumer. Commerce facilitates exchange. For better understanding, we must understand the difference between industry and commerce. These business activities are economical, and it helps us procure profit. However, elements of risk and uncertainty of return are still very much possible.
Industry
Both industry and commerce are two different ways of doing business. When we procure or extract raw materials and convert them into finished goods that reach the final consumer, it is an industry. In industry, activities demand the use of mechanical appliances and technical skills like manufacturing, production, and processing of finished goods. The industry is associated with the supply side of the market. The examples of activities covered under industry are extraction of raw materials, conversion of these raw materials into finished and useful goods, and activities like construction.
Types of Industries
The industry has factories in it which are different from each other. They all specialize or have a specific product line. There are three types of industries:
Primary Industry
The factories concerned with the extraction of natural resources are called primary industries. For example, mining, forestry, agriculture, etc. Primary industries are further classified into two types- extractive industries and genetic industries.
Secondary industry
The factories engaged in conversion activities, meaning-making use of products that we got from the primary industry as raw materials and processing them into the production of finished goods, is called the secondary industry. For example, we get iron ore from mining done in the primary industry, but when we process that iron ore into the production of steel, it is done in the secondary market. Secondary industries can be further classified into two types- manufacturing industries and construction industries.
Tertiary or Service Industry
They provide support services to the primary and secondary industries and facilitate a smooth flow of goods and services. For example, banking, transport, insurance, advertising, etc.
The proper functioning of the industries in every state is looked after by the industries and commerce department.
Commerce
It’s called commerce when we buy or sell goods and services for a value like cash or similar, usually on a large scale, between businesses from one place to another. Transaction means to buy or sell a particular item. So, commerce can also be referred to as all the transactions in the economy. Commerce is when the business activity facilitates exchange. It also ensures the proper distribution of goods to the final consumer. It ensures the availability of goods to the customers at the right time and right place.
Types of Commerce
Commerce is broadly classified into two types:
Trade: when goods and services are bought and sold for money, it is called trade. It can be further classified into internal trade and external trade.
Aids or auxiliaries to trade activities that assist trade directly or indirectly like finance, insurance, warehousing, etc.
Difference between industry and commerce
Conclusion
In this topic, we learned two important types of business activities. Industry converts raw materials into finished goods and represents the production part. Commerce is buying and selling goods on a large scale for a value representing the distribution part. Learning about these two helps in classifying business activities into their correct forms. The industry and commerce-related affairs are looked after in a state by its industry and commerce department. We learn the difference between industry and commerce based on five points. These differences help us in understanding these business activities more clearly.
