Commerce Lesson Note for SS1 First Term

Lesson note on Commerce –edudelight.org

FIRST TERM SCHEME OF WORK FOR SS1

WEEKS	TOPICS
1	Introduction to commerce
2	Historical Background of commerce
3	Career Opportunities
4	Occupation
5	Production
6	Specialization
7	Trade
8	Classification of Retail Trade
9.	Modern trends in Retailing
10	Wholesale Trade
11	REVISION
12	EXAMINIATION

WEEK 1

TOPIC: INTRODUCTION TO COMMERCE

Commerce is a social science and a branch of production. It is the process of buying, selling and distribution of goods and services through the assistance of various activities such as advertising, banking, communication, insurance etc.

Commerce can also be defined as the study of how man buys, sells and distributes goods and service.

E-commerce means electronics commerce. It is the process of buying, selling and marketing of products or services over the internet i.e. other digital technologies e.g. fore and trading, jumai konga, OLX etc.

Forms of E – Commerce

Retailing – for retail shopping on internet
Market data gathering through wed – organisations gather data about their customers
Electronic data inter-charge – exchange of data between businessman and another
E – mail and Fax – used as media for reaching prospective and established customers e.g. new letter.
Business to business contact through web – is a quick way to reach right people in another company for more information

Products suitable for E – Commerce are:

Financial transactions
Communication
Moves
Photography
Software
Music

E – Commerce will affect business in these ways:

It reduces transaction cost of individual by using forms of electronic data inter-change
It enhances connectivity i.e. individuals and business partners can communicate with one another worldwide and it leads to positive effect on global market
It makes payments to be made using credit cards and reduced the use of physical cash
E – Commerce provides opportunity for manufacturer to communicate directly with the consumers.

SCOPE OF COMMERCE

Commerce corners all commercial activities which ensure the distribution and exchange of goods and services for the satisfaction of the people. Commerce is divided with trade and aids to trade which are advertising, banking, communication etc

FUNCTIONS OF COMMERCE

Provision of employment
Exchange of goods
Improvement in the standard of living
Aids rapid transfer of information
Facilities international cooperation
Mass production of goods
Warehousing of goods

Exercises: Why is commerce blood line of a nation?

DIVISION OF COMMERCE

Commerce is divided into trade and aids to trade

A trade – is the process of buying and selling of goods and services. It is divided into home and foreign trade.

1. HOME TRADE – is buying, selling of goods and services within the boarder of a country. It can be divided into retail and wholesale trade

a. Wholesale trade – is the process where wholesaler buys goods from the producer in bulk and sell in small quantities to the retailers e.g. merchant, agent, broker, cash and carry etc

b. Retail trade – is buying of goods and services from wholesaler in small quantities and selling in units to the consumers, e.g. hawking, mobile shop, street trade, chain stores etc

2. FOREIGN TRADE – is the buying and selling of goods and services between different countries. It is trading outside the boundary of a country. It is divided into import, export and entreport.

a. Export – is the sales of goods and services to other countries i.e. selling the products of a country abroad. There are visible and invisible export e.g. Nigeria exports cocoa, crude oil, rubber, cassava.

b. Import – is buying of goods and services from other countries e.g. cars from Japan, machines from ceremony etc. imports is divided into visible and invisible items. Nigeria imports are electronics, cars, computers, equipment, rice etc.

c. Entreport – is the re-exporting of goods that have been imported from other countries i.e. goods imported to a country are later re-exported to another country.

AIDS TO TRADE

These are commercial activities which assist trade. They are

1. Advertising – is the process of creating awareness about the existence of a product in order to stimulate demand. Media of advertising are Radio, free sample, television, newspaper, journal, magazine, sales van etc.

2. Banking – is the acceptance of deposits from customers and making funds available to businessmen for business transaction. Banks are financial institutions in which money and other valuables are kept for safe keeping and loans given out to people.

Types of banks are Central Bank, Commercial bank. Mortgage bank, Merchant bank etc.

3. Communication – is sending and receiving of information from one person to another for easy interaction. e.g. telex, telephone, E-mail, internal etc.

4. Insurance – this is a process whereby an insurance agrees to indemnify an insured against loss. It is pooling of risk and is a contract of utmost good faith, (uberimaefidei).

Types of Insurance – life assurance, fire, marine, burglary, motor vehicle, cash in transit, stock in transit etc.

5. Tourism – is visiting places of interest outsider one’s country or resident for relaxation, holiday and exercusion. It is major source of income to some countries. Nigeria tourist centres are Erin-Ijesha water fall in Osun State, Ikogosi warm spring in Ekiti State and Yankari games reserves in Bauchi state.

6. Transportation – is the movement of goods and people from one place to another forms of transportation are air, rail, road, sea and pipeline

7. Warehousing – is the storing of goods until they are demanded for in order to ensure regular supply. Types of warehousing are public, state, bonded and manufacturer.

Lesson note on Commerce –edudelight.org

WEEK TWO

HISTORICAL BACKGROUND OF COMMERCE

In the early days of the history of man, people were self – sufficient in that they grow their own food, built their shelter make their own clothes and satisfied all other wants. There was no exchange of goods and services among the people.

As the society grew, the needs increases in which they exchange goods for goods and services for services without the use of memories which is known as barter system. The system has a lots of problems and give rise to use of money as medium of exchange.

Later, traders came from various parts of the country on market days to transact business and major commercial centres were known as Onisha and Ibadan

Merchants also come from North Africa which let to modern commercial activites across the sahara trade routes where goods were exchange for salt, cowries, tobacco with kolanuts and skins in Kano, Daura and Zaria.

The activities when missionaries and traders came from Europe to trade in places like Badagry, Opobo and Bonny where they exchanged salve for forearms cloths and communications.

Then, Colonailism changed the dimension of trading activities in Nigeria. They establish companies like United Africa company (UAC) John Holt and GB Ollivant etc. Nigeria became exporter of cocoa, palm oil and crude oil.

Today, commerce is the bed rock of trade growth and development with development of trade and aids to trade and the introduction of Electronics Commerce (E-coomerce), Automated Teller Machine (ATM) and Electronic Fun Transfer (EFT).

Factors that contributed to the growth of commerce

Increase production
Improvement in transport facilities
Development of modern techniques
Improvement in means of communication
Development and improvement of warehouse
Development of financial institutions
Provision of insurance industry

Factors that adversely affect the growth of Commerce in Nigeria

Inadequate capital
Poor communication system
Low per capital income
Absence of large market
Political instability
Low level of education
Immorbility of labour
Prevalence of fraudulent activities

Exercise: Explain the barter system and its problem.

WEEK THREE

CAREER OPPORTUNITIES IN COMMERCE

Career – means series of job that a person has in a particular area of work.

Career opportunities are professions that are available for students of commerce.

A. Career is teaching – students from collegues of education, polytechnic and universities can be employed to teach:

i. Business studies

ii. Accounting

iii. Commerce

iv. Economics

B. Career in lecturing – the qualifications required for lecturing are master of science and doctor of Philosophy. In addition to Bachelor degree.

They can teach these:

i. Accounting

ii. Management

iii. Finance

iv. Economics

v. Insurance

vi. Banking

C. Career in Civil/Service

Post Grade level

Director General 17

Directors 16

Assistant Director 15

Chief Budget Officer 14

Clerical Officer 4

Clerical Assistant 3

Messenger 2

D. Career in private sector

a. Trading: Opportunities are available for skilled and unskilled workers in

– Wholesaling

– Retailing

– Importing

– Exporting

– Agency

b. Insurance

– Risk manager

– Brokers

– Underwriters

– Agents

c. Market

– Salesmen

– Marketing executives

– Marketing managing

d. Management

– Personnel officer

– Administrative office

– Clerical officer

– Management trainees

e. Banking

– Cashiers

– Tellers

– Operation managers

f. Accounting

– Account clerks

– Accountants

– Internal auditors

– Finance managers

– Treasury managers

Basic Requirement For Employment

School certificate (SSE)
National Diploma (OND & HND)
National Certificate of Education (NCE)
Bachelor of Science (BSc.)
Master of Science (MSc)
Doctor of Philosophy
Professional qualifications like
ICAN – Institute of Chartered Accountants
IB – Institute of Bankers
CIS – Chartered Institute of Secretaries etc

Exercise: What is your ambition? Write on your ambition and the subjects. You need to offer in school.

WEEK FOUR

OCCUPATION

Occupation can be defined as a legal job. Profession or productive activity that an individual engages in to earn a living and to satisfy their wants and needs.

There are various kings of occupations that a person can do, some are extracting resources from soil, manufacturing giving form of raw materials construction and services.

Factors determining the type of occupation

1. Availability of natural resources – the type of natural resources in a particular place will determine the type of occupation which people can engage in for instance, in riverine area, most people there will fisherman/woman

2. Condition of service – job that attract high renumeration and better condition of service will people than poor condition of service

3. Level of education and training – level of education and training acquired will affect the kind of job people engage in e.g. unskilled workers are employed as cleaners, gateman and drivers

4. Climatic and weather conditions – changes in climate and weather in any environment will determine the nature of works in that environment e.g. fisherman in riversides, farming and lumbering in forest region.

5. Interest/aptitude of the people – the natural ability or talent of the people will determine the type of occupation they will engage in.

6. Government policies – policies of the government in such an environment will help to determine the choice of occupation, if it is favourable or not.

OCCUPATION

Industry Commerce Service

Extraction Manufacturing Construction Direct Indirect

– Farming – Textiles – Welding Servant Navy

– Lumbering – Cement – Road Guards Police

– Mining – Production – House Barbing Civil servant

– Forestry – Ceramics – Construction Family doctor Public servant

Trade Aids to Trade

– Advertising

Home Foreign – Banking

Retail – Wholesale – Communication

– Insurance

Export Import Entreport

Classification of Occupation

Industrial occupations
Commercial occupation
Services

A. Industrial Occupation – these are activities which are concerned with obtaining raw materials from and turning them into finished goods. This is divided into:

i. Extractive occupation

ii. Manufacturing occupation

iii. Constructive occupation

1. Extractive Occupation – this involve all the activities of those who are engaged in primary production that is extracting natural resources from the soil and sea e.g. miners, farmers etc.

2. Manufacturing – are activities which turn processed materials into consumer or industrial goods e.g. books, shoes, clothes etc.

3. Constructive – this engaged in the construction roads, bridges and houses.

B. Commercial Occupation – is concerned with people that engaged in the marketing and distribution of finished goods e.g. trade advertising, communication etc.

C. Services Occupation – these involve occupations that provide personal and indirect services to the people.

There are two types of services:

Direct services: are services rendered directly to people who enjoy the maid, private doctors.
Indirect services – these are services rendered to members of the public but are paid for by government e.g. public teacher, doctors, public soldier.

Exercise: (i) Define industry (ii) Explain five types of industrial occupations

Physics Lesson Note – edudelight.org

WEEK FIVE

PRODUCTION

Is the transformation of raw materials into finished goods and the distribution and provision of goods and services in order to satisfy human wants.

TYPES OF PRODUCTION

Primary production
Secondary Production
Tertiary Production

Factors / Agents of Production

Factors Rewards

Land Rent

Capital interest

Labour Wages or salary

Entrepreneur Profit or loss

PRODUCTION

Industry Commerce Service

Primary Secondary Trade Aids to trade Direct Indirect

– extraction – manufacturing

– construction

WEEK SIX

SPECIALIZATION/DIVISION OF LABOUR

Division of labour – is a system of breaking down production processes into different stages so that each stage is handled by an individual.

Specialization – is the act of an individual or firm concentrating its resources and efforts in the production of relatively few commodities.

Advantages

Time saving
Increase in production
They are less fatique
They create employment

Disadvantages

They make work monotonous
They bring about immobility
Use of machines reduces employment

Exchange – division of labour and specialization give rise to the concept of exchange.

Exercise: What is specialization? Give three advantages and disadvantages of specialization.

WEEK SEVEN

TRADE

Is the buying, selling and exchange of goods and services among people and countries.

TRADE

Home Trade Foreign Trade

Retail Wholesale Import Export Entreport

Physics Lesson Note – edudelight.org

WEEK EIGHT

CLASSIFICATION OF TRADE

A. HOME TRADE – is buying and selling of goods and services within a country. It is also known as domestic or internal trade.

Home trade is divided into:

Retail trade
Wholesale trade

– Retail Trade – involves selling goods in units to the final consumer after buying in small quantities from the wholesalers.

Function of A Retailer

Purchase of goods from the wholesaler
Provision of credit facilities to customers
Door to door selling

RETAIL TRADE

Small Scale Retailers Large Scale Retailers

– Itinerant – Departmental shop

– Roadside – Supermarkets

– Market trader – Chain stores

– Village stalls – Mail order firms

– Tied shops – Co-operative shops

– Mobile shops – Hypermarket

– Small stores – Franchising

E-Retailing (Electronic Retailing) – is a new system of retail business. E-retailing is a place on the internet for direct retail shopping with twenty-four hours global reach.

Exercise: Write short note on the following types of retail outlets:

Hawker
Mobile shops
Supermarket

WEEK TEN

WHOLESALE TRADE

Is the process whereby the wholesaler buys goods in bulk/large quantities from the producer/manufacturer and re-sell to the retailer in small quantity.

Wholesale – is a trader who buys from the producer in bulk and sells in small quantity to the retailer.

Functions of wholesalers producers