Give the functions of commerce.

It consists of trade, and the activities which facilitate trade.

The process of exchange is full of hindrances. The principal function of commerce is to remove these hindrances so as to ensure a free and uninterrupted flow of goods and services from producers to consumers.

These hindrances have been described below :

1. Hindrance of place : Very often goods are produced at places far away from the points of consumption. Various means of transportation remove this barrier of distance and help to establish a link between the two. Packaging of goods to protect them from damage and pilferage in the course of transit, help remove the hindrance of place and thereby creates place utility.

3. Hindrance to Time : Goods are generally produced in anticipation of demand. Therefore, it becomes necessary to store them and make them available as and when the consumers demand them.

4. Hindrance of risk : During transportation and storage, goods are subject to several types of risk. Goods may be stolen or damaged. Insurance covers this risk.

5. Hindrance of exchange : Exchange or sale of goods requires safe and economic arrangement for the payment of price. Dealing in goods involve the problems of time and place of payment. Money serves as the medium of exchange and thereby removes the hindrance of exchange.

6. Hindrance of knowledge : Exchange of goods can take place only when the seller brings his products to the notice of prospective buyers. Advertising and publicity provide the necessary information to prospective buyers about the utility and features of various products. In this way, they help to remove the hindrance of knowledge.
Therefore, commerce plays a role in ensuring that the hindrances are minimized and a smooth flow of trade happens between the producer and the consumer.