Commerce
Commerce is fundamentally the process of buying, selling, or exchanging goods and services. It encompasses a wide range of activities, from traditional brick-and-mortar retail to modern e-commerce, which allows consumers to shop online from the comfort of their homes. The evolution of commerce has been significantly influenced by advancements in transportation and technology, starting from the era of railroads that facilitated interstate trade to the current age of the Internet, which has transformed global trade dynamics.
Commerce is categorized into various relationships, including business-to-business (B2B), where wholesalers sell to retailers, and business-to-consumer (B2C), where retailers sell directly to consumers. In recent years, consumer-to-consumer (C2C) transactions have gained traction through online platforms. E-commerce has seen substantial growth, driven by increasing Internet penetration, with billions of users worldwide engaging in online shopping.
Additionally, mobile commerce (m-commerce) is emerging as a vital aspect, enabling transactions via smartphones and apps, further enhancing the convenience of purchasing. External factors such as regulations, infrastructure, competition, and technological advancements continuously shape the landscape of commerce, influencing how businesses operate and consumers engage in the marketplace. Understanding these elements can provide valuable insights into the complexities of modern commerce.
Commerce
Commerce is the buying, selling, or exchanging of goods and services. Much commerce involves the sale of merchandise, which can be obtained a variety of ways. Commerce has evolved through the years to accommodate traditional brick and mortar stores, mail-order operations, and websites. With the introduction and expansion of the Internet, customers, which range from individuals to businesses, can purchase items directly from buyers without even having to leave home.
Overview
Commerce involves manufacturers, sellers, and buyers. Companies that produce goods and services require materials and parts. They also need a way to sell the finished goods, which in turn requires wholesale and retail businesses. Wholesale companies buy from manufacturers and sell to distributors or retailers in a business-to-business (B2B) relationship. Retail businesses sell to consumers in settings such as brick and mortar stores and online. These are business-to-consumer (B2C) entities.
Once railroads made long-distance transportation possible, the country opened up to interstate commerce. More efficient sea and air shipping enabled wider global access, but the ability to buy and sell on the Internet brought the biggest changes. B2B and B2C sales boomed, while consumers selling to consumers (C2C) evolved from newspaper ads and thrift shops to auction websites such as eBay and classified advertising sites such as Craigslist.
Interstate Commerce
Interstate commerce is the transportation of goods and services across state lines. It began in the late 1800s when farm products grown in the Midwest—corn, wheat, oats, and livestock—had to be moved to markets in other areas of the country. At that time, railroads were the most efficient form of long-distance transportation. The privately owned railroads took advantage of the high demand for their services until the government set regulations. The Interstate Commerce Act of 1887 targeted the railroads' methods of rate setting and their natural monopolies in each service area. Later regulations, including the Hepburn Act of 1906 and the Mann-Elkins Act of 1910, strengthened the government's power.
The development of roads and highways and the introduction of cars, trucks, and later public transportation also hurt the railroad industry. Until the middle of the twentieth century, road development was a responsibility of each state. That changed in 1956, when U.S. president Dwight Eisenhower authorized a massive interstate highway system, which enabled the development of a trucking industry. This created a direct competition for the railroads. In time, the Department of Transportation, which was established in 1966, would oversee railroads and commercial air service, as well as highways.
Global Commerce
Global commerce has existed for centuries, first as an extension of the empires in China and Europe and later migrating west as the United States became a world power. When communication and transportation improved, opportunities for international commercial ventures gradually expanded. However, the greatest leap came with the advent of computer technology and the Internet, which stretched the reach of international trade to all corners of the globe. Electronic commerce (or e-commerce) allowed companies to advertise their goods worldwide at lesser costs, and search engines encouraged consumers to initiate contact when seeking a particular product or service. While income, government controls, culture, and education levels played a role in the availability and acceptance of Internet commerce, smartphones and public demand narrowed the gap between developed and developing markets. Between 1995 and 2014, the number of Internet users—all potential customers—rose from 16 million, or 0.4 percent of the world's population, to nearly 3 billion—almost 41 percent of the population. In the United States, 85 percent of the population was connected, while even developing countries in Africa and Asia could count their Internet users in the millions. Numbers continued to rise throughout the twenty-first century. According to the World Bank, in 2022, 64.7 percent of the world population had access to the internet. In the United States, 97.1 percent of people had internet access in the same year. According to a poll conducted by the National Public Radio and Marist College in 2023, 75 percent of Americans were online shoppers, contributing to the worldwide growth of online sales, or e-commerce.
Outside Forces
All types of commerce are affected by outside forces such as regulations, infrastructure, competition, social conditions, and even weather. Businesses have little or no control over these factors, which can affect processes, efficiency, and expenses. For example, if a retailer usually receives goods from a vendor by truck, he or she would be unable to fulfill orders in a timely manner if a bridge collapsed, if truck drivers went on strike, or if a severe storm closed highways.
In addition, technology allowed not only buying and selling over the Internet, but also electronic delivery of products such as music and books. These produces are convenient to use in electronic form, and consumers have options such as purchasing single songs, rather than complete albums. The instant gratification, lower prices, and convenience of e-books and music files were a tremendous setback for traditional publishers and suppliers of these products.
E-Commerce
E-commerce is the name for electronic business, which provides products and services over the Internet. It includes B2B, B2C, and C2C transactions. Machinery, parts, and materials for industries, as well as consumer products such as clothing, electronics, and household goods, can be ordered online, paid for electronically, and shipped to the customer.
Advertising is relatively inexpensive and can be focused using tracking data that documents each user's interests. Delivery of the products involves time and expense, but the convenience of home shopping and the wide array of choices appeals to consumers. Digital goods, including downloadable music, books, and videos, are ordered in a similar way, but require up-to-date technology to transmit the files through the Internet. Service businesses such as banks, travel agencies, and website designers also thrive online.
M-Commerce
M-commerce, or electronic transactions completed over mobile devices such as smartphones, is an ever-growing, fast form of commerce that allows consumers to make purchases almost instantaneously. Applications, or apps, allow for all kinds of commerce, such as retail purchases, downloads of games, music, and movies, and videoconferencing services. Many companies have their own apps, allowing for customers to shop solely that company's products. These apps send notifications to the customer to alert them of deals and items in their online shopping carts. The expansion of 5G and other technological enhancements propelled commerce even further. The fifth-generation mobile network, or 5G, is a global wireless standard that delivers extremely high data speeds, low latency (or delay), high network reliability, and increased availability. Since its inception, the number of users with access to mobile technology for faster purchasing experiences has increased.
Bibliography
“Archives and DOT History.” National Transportation Library, United States Department of Transportation, 18 Sept. 2024, transportation.libguides.com/c.php?g=1154894&p=8441208. Accessed 29 Nov. 2024.
Bloomenthal, Andrew. “Mobile Commerce: Definition, Benefits, Examples, and Trends.” Investopedia, 24 Mar. 2022, www.investopedia.com/terms/m/mobile-commerce.asp. Accessed 29 Nov. 2024.
Bowers, Helen, et al. From Lighthouses to Laserbeams : A History of the U.S. Department of Commerce. U.S. Department of Commerce, Office of the Secretary, 1995. search.library.doc.gov/discovery/fulldisplay?context=L&vid=01USDOC‗INST:01USDOC&docid=alma991000064769704716. Accessed 29 Nov. 2024.
Chen, James. “Commerce: What It Is, How It Differs from Business and Trade.” Investopedia, 26 Feb. 2024, www.investopedia.com/terms/c/commerce.asp. Accessed 29 Nov. 2024.
“Individuals Using the Internet (% of Population).” Data Catalog, World Bank Group, 28 Oct. 2024, databank.worldbank.org/reports.aspx?dsid=2&series=IT.NET.USER.ZS. Accessed 29 Nov. 2024.
"Interstate Commerce Act." PBS. WGBH Educational Foundation. 2013. Web. 5 Nov. 2014. http://www.pbs.org/wgbh/americanexperience/features/general-article/streamliners-commerce/. Accessed 29 Nov. 2024.
“Origins: 1776-1913.” U.S. Department of Commerce, www.commerce.gov/about/history/origins. Accessed 29 Nov. 2024.