Difference Between Industry and Commerce

Edited by Diffzy | Updated on: June 06, 2023


Difference Between Industry and Commerce

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Business is an economic activity that involves the provision of goods and services for profit. There are two broad categories of business activities: industry and commerce. Industry is concerned with the production of commodities, whereas commerce is concerned with the distribution of goods and services. The Industry encompasses all activities connected with the transformation of raw resources into finished items. Commerce, on the other hand, seeks to provide items in the right place, in the right number, in the right quality, and at the right time. Take a peek at this essay extract to learn about the fundamental differences between industry and commerce.

Industry vs Commerce

The key distinction between industry and commerce is found in their core operations and concentration. The Industry is primarily concerned with the making of physical commodities, whereas commerce is concerned with the interchange, distribution, and sale of goods and services. The industry is concerned with the creation and manufacture of tangible objects, whereas commerce is concerned with facilitating transactions and satisfying customer requirements through the purchase, sale, and distribution of commodities and services.

Difference Between Industry and Commerce in Tabular Form

MeaningIndustry is a type of economic activity that involves the procurement and processing of raw materials into completed products that are sold to customers.Commerce is a large-scale business activity that involves the exchange of products and services for monetary value.
ScopeIncluded in the production cycle are research, development, manufacturing, and distribution.Management of supply chains, marketing, advertising, and providing services associated with the purchase and selling of items are all part of the job.
LocationIndustries are typically placed on industrial belts, which are located distant from residential areas.In truth, there is no specific commercial site. It provides its services anywhere.
ResourcesFor production, industries primarily require machinery, materials, and labour.Commerce is mostly powered by human labour.
CapitalIndustries necessitate a large amount of capital. It is primarily determined by the scale of the industry.Commercial activities, on the other hand, necessitate less capital.
RiskHigh.Comparatively low.
ClassificationPrimary, secondary, and tertiary industries are distinguished.Commerce is separated into two categories: trade and trade auxiliaries.
RepresentProduction is a component of corporate operations.Distribution is a component of business operations.

What Is Industry?

An industry is defined as the economic activities related to the procurement or extraction of raw materials and their transformation into finished products that reach the final client. The term 'industry' refers to activities that include the use of mechanical appliances and technical abilities, such as the manufacture, production, and processing of products. It represents the market's supply side. The following activities are covered by industry:

  • Coal, petroleum, and other commodities are extracted.
  • Conversion of raw resources into usable commodities such as soap, fans, cement, and so on.
  • Buildings, dams, and highways.

In economics, industries are divided into four categories: primary, secondary, tertiary, quaternary and secondary industries are further divided into heavy and light industries.

Primary Industry

Agriculture, forestry, fishing, mining, quarrying, and mineral exploitation are all part of a country's economy. It is classified into two categories: the genetic industry, which includes the production of raw materials that can be grown via human involvement in the manufacturing process, and the extractive industry, which includes the production of exhaustible raw resources that cannot be raised through cultivation.

Agriculture, forestry, livestock management, and fisheries are all genetic sectors that are vulnerable to scientific and technological advancements in renewable resources. The extractive industries include mineral ore mining, stone quarrying, and mineral fuel extraction. Primary industry dominates the economy of developing and underdeveloped countries, but when secondary and tertiary sectors expand, primary industry's share of economic output declines.

Secondary Industry

This sector, also known as the manufacturing industry, (1) processes raw materials supplied by primary industries into consumer goods, (2) further processes goods transformed into products by other secondary industries, or (3) constructs capital goods used to manufacture consumer and Non-consumer goods. Energy-producing businesses (e.g., hydroelectric industries) and the building sector are further examples of secondary industries.

Secondary industry is classified as heavy, large-scale, light, or small-scale. broad-scale industry typically necessitates significant capital investment in facilities and machinery, services a broad and diverse market that includes other manufacturing industries, has a sophisticated industrial organization and, in many cases, a skilled specialized labour force, and generates a big volume of output. Light, or small-scale, industry may be distinguished by the nondurability of manufactured items and lower capital investment in facilities and equipment, as well as nonstandard products, such as customized or craft work. Textile and apparel manufacturing, food processing, and plastics manufacturing all have low-skilled labour forces, whereas electronics and computer hardware manufacturing, precision instrument manufacturing, gemstone cutting, and craft work all have highly trained labour forces.

Tertiary Industry

This sector, sometimes known as the service industry, encompasses industries that provide services or intangible gains or produce money while generating no tangible commodities. This sector is typically a mix of private and public activity in the free market and mixed economies.

Banking, insurance, financial investment, and property management services; wholesale, retail, and resale trade; transport, information, and communication services; expert, consulting, acceptable, and personal services; tourism, hotels, restaurants, and entertainment; maintenance and repair services; educational institutions and teaching; and health, social welfare, administrative duties, police, security, and defence services are all included in this sector.

Quaternary Industry

Quaternary industry, an extension of tertiary industry that is frequently recognized as its sector, is concerned with information-based or knowledge-oriented products and services. It, like the tertiary sector, is a blend of private and public efforts. Information systems and information technology (IT) are examples of industries and activities in this sector, as are research and development, which includes technological development and scientific research, financial and strategic analysis and consulting, media and communications technologies and services, and education, which includes teaching and educational technologies and services.

What Is Commerce?

The term 'commerce' refers to a business activity that involves the purchasing and selling of goods or services for monetary or in-kind value on a wide scale, between businesses or entities, from one location to another. A transaction is defined as the purchase or sale of a specific object, whereas commerce refers to all transactions related to the purchasing and selling of that thing in an economy.

Commerce encompasses any economic activities that are tied to exchange in some form. It addresses the distribution side of the business, i.e., it aids the consumption process by providing an appropriate distribution channel. As a result, it ensures that goods and services are available to customers at the appropriate time and place.

Evolution of Commerce

Since ancient times, commerce has been an essential component of human civilization. Initially, trade was conducted by barter, in which products were directly exchanged. The introduction of cash and the establishment of marketplaces led to an increase in commerce over time. The growth of seafaring nations, as well as the development of trade routes such as the Silk Road, encouraged the interchange of products between various locations. Commerce advanced further with the industrial age, including the expansion of industrialization and mass production.

Branches of Commerce

There are two types of commerce: trade and everything that facilitates trade. Each branch contains multiple sub-branches that characterize it.


The transfer or sale of goods or amenities among two or more parties is referred to as a trade. Internal and external trade are the two main types of trade.

Internal trade is defined as a trade that occurs within the borders of a single country. Internal marketing can be both wholesale and retail:

WHOLESALE TRADE: As previously stated, wholesale trade is the purchase of products and services in bigger quantities to resell them to other intermediate users. Individuals that attempt to resell it to different merchants or retailers are known as wholesalers. They sell to industrial, institutional, and commercial consumers, but not to individuals or institutions in smaller quantities. Wholesalers serve as the intermediary between the supplier and the store.

  1. They increase the possibility of selling items to a bigger public, assisting the manufacturer in making large sales.
  2. Wholesalers sell the items in their name, assuming the risk; they buy in bulk and sell in smaller numbers than retailers.
  3. They sell to individuals, institutions, as well as commercial users, but not to consumers.
  4. Their responsibilities include grading the items, packing them into smaller quantities, storing them, transporting and promoting the commodities, and gathering market information.

RETAIL TRADE: The sale of products by retailers to end users is known as retail trade. This is a sort of business enterprise that sells goods and services to end users. The retailer buys huge amounts from the wholesaler and sells them to clients in much smaller volumes. The merchant symbolizes the ultimate stage of distribution, which begins with the manufacturer. Retailers are that branch of business that distributes things to end users who are consumers for personal or non-business consumption. Retailers can offer their products in a variety of methods, including in person, over the phone, and through vending machines.

External trade is defined as trading between entities in various nations. External commerce occurs when a factory in the United States purchases parts from a company in China.

External trade is classified into three types:

  • The purchasing of commodities from another country is referred to as import.
  • The sale of products to another country is referred to as export.
  • The acquisition of commodities from one country for selling to a third country is referred to as entrepot.

Auxiliaries to Trade

All activities that aid in the process of commerce are considered trade aids. Transportation, warehousing, distribution, advertising, insurance, and banking are examples.

  • The process of transferring things from one site to another, whether raw materials from a supplier to a manufacturer or finished goods from a merchant to a consumer, is known as transportation.
  • Warehousing is the process of storing products before they are offered for sale and moved to another business.
  • When items are sold from one entity to another, this is known as distribution. Manufacturers redistribute to wholesalers, who in turn distribute to retailers, and merchants distribute to customers.
  • Advertising is used to inform purchasers about the products and services provided by sellers - and to persuade them to purchase those goods and services.
  • Some of the hazards connected with the trading process are mitigated by insurance.
  • Banking offers the funding required to fill the gap between when an item is manufactured and the moment it is purchased, as well as to assist a firm stay operational.

Importance of Commerce in Global Trade

Commerce serves as a link between manufacturers and consumers all around the world. It allows countries to specialize in producing goods and services where they have an advantage in comparison, resulting in enhanced efficiency and commerce. Nations can gain access to resources, products, and innovations that might otherwise be unavailable in their home countries through commerce. It promotes competition, supports innovation, and promotes international economic integration.

Main Differences Between Industry and Commerce in Points

The following points examine in depth the key contrasts between industry and commerce:

  • The industry is described as a business associated with the acquisition and processing of unprocessed materials into completed products for sale to customers. Commerce is defined as a business activity in which commodities and services are exchanged for monetary value on a wide scale.
  • To start an industry, a large capital investment is required. Commerce, on the other hand, necessitates a lower capital commitment.
  • The industry is the transformation of raw materials into finished items. In contrast, commerce involves activities that are required to facilitate the purchasing and selling of things.
  • The industry is a measure of the manufacturing component of commercial activity.


We studied two major sorts of business activity in this topic. The Industry is the part of the industrial process that converts raw resources into finished items. Commerce is the buying and selling of goods on a big scale for a monetary value, which represents the distribution part. Understanding these two concepts' aids in categorizing company activity. A state's industry and commerce department oversee its industry and commerce matters. We discover the distinction between industry and commerce. These distinctions aid us in better understanding these economic activities.


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"Difference Between Industry and Commerce." Diffzy.com, 2024. Tue. 27 Feb. 2024. <https://www.diffzy.com/article/difference-between-industry-and-commerce>.

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