Concept and Types of industry

Industry means place where the resources are converted into finished or useful products. There are basically three types of industries.

I) Primary industry

II) Secondary industry

III) Tertiary industry

I) Primary industry: This type of industry involves in the activities related to extraction and production of natural resources. It also performs activities relating to the reproduction and development of living organisms. It is of two types:

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Concept of Commerce

Commerce includes all those activities which are necessary for maintaining the free flow of goods and services from the producers to the ultimate consumers.

Branches of commerce

  1. Trade: trade refers to sale or exchange of goods and services. It is of two types: internal and external trade. Internal trade refers to the trade within the country. It is further divided into two parts wholesale trade and retail trade. In wholesale trade goods are bought in wholesale and sold to retailers. In retail trade goods are bought from whole-sellers and sold to the ultimate customers.  External trade refers to the trade outside the country. It is of three types: Import, Export and Entrepot. Import means purchasing goods from other country. Export means selling goods to other country. Entrepot means goods are imported for exporting to other country.
  2. Aids to trade: It means all those activities which help in the trading process. These are: transport and communication, banking and finance, insurance, advertising, and warehousing. Transport creates place utility by movement of goods from one place to another. Banking creates finance utility by providing financial assistance to the businessman. Insurance creates risk utility by providing cover against business risks. Warehousing creates time utility by storing the goods and advertising creates the knowledge utility by providing information to the customers. The following diagram will explain in detail about the commerce and its various types:
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