Aids to Trade
- Finance (banking): banks provide money to buy raw materials and finished products, provide channels for payment of goods on credit, and offer safe custody for members’ money.
- Transport: quickens the delivery of goods to manufacturers and consumers, and opens up a country for the exploitation of its resources.
- Insurance: since all productive activities carry risk, insurance protects producers against accidents in exchange for a premium.
- Warehousing: goods produced need to be stored until needed by consumers, hence the necessity of a warehouse.
- Advertisement: creates awareness of a good’s existence in the market and the availability of raw materials.
- Communication: helps the trader get the right information about the availability of a good in different parts of the country.
Importance of Commerce
- Encourages specialisation and is a source of employment for traders and bankers.
- Provides money for the development of businesses and industries through financial institutions.
- Reduces risk elements through the provision of insurance services.
- Provides a variety of goods in all areas, as goods in surplus areas are bought and sold in areas of scarcity (distribution services).
- Increases the standard of living, as a wide variety of goods are offered through many services.
- Reduces the gap between the time of production and the time of consumption, made possible by warehouses.
