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We provide you with quality data, updated and verified by a team of experts in the field. Do not miss any detail, because after reading this publication you will have an extensive overview of what a commercial organization implies and what its fundamental elements are.
You will be surprised to know that many of the businesses and stores that you see when you walk down the street are simply commercial businesses . The corner store, the gift shop, the kiosk, that clothing store that you like so much, your favorite shoe store, the place where you always buy office supplies, the small supermarket you go to almost every day … Did you have any idea? from this? Surely you did not imagine … So, read on and find out everything about the subject.
- 1 What is a commercial company?
- 2 Types of business enterprise
- 2.1 Wholesalers
- 2.2 Retailers
- 2.3 Brokers
What is a commercial company?
Let’s start by answering this simple question. Traditionally, a “ commercial company ” is a firm that is dedicated to buying and selling (that is, exchanging) certain products and services. Like any other type of company, it has to be registered under the law and operate under certain specific regulations.
Its peculiarity –as we have just suggested- lies in the fact that this association acts as an intermediary between the companies that produce goods and their recipients, that is, the consumers. Its main function is the intermediation, distribution and exchange of consumer items; that is to say, it is not dedicated to producing anything. A commercial company does not carry out production processes of transformation or improvement of raw materials, as is the case in manufacturing industries.
Now, with what kinds of goods or articles can a commercial company carry out economic activities ? You will be surprised to know the variety of possibilities in this regard:
- Raw materials: the company acquires raw natural elements to resell them to the plants that industrialize them.
- Intermediate goods : these are goods that are not yet finished and must go through new phases of the production process to be ready to consume.
- Final goods: these are items that can already be consumed.
- Capital goods: these are machinery, vehicles, specialized technology, etc. that is necessary for production or logistics. These can be sold to manufacturing firms or final consumers.
Even though the type of company we are considering is not dedicated to producing goods, we can talk about some specific functions of the activity, such as the transfer of elements, their storage, sales management, distribution to other industries. and to the market. Only in some cases, the buying and selling functions are complemented by other services such as maintenance or repair.
Now, beyond these generalities that we have outlined, what are the specific functions of a commercial company ? Let’s see it in more detail:
- Generate demand : this type of entity seeks buyers by creating specific needs for the product it sells and makes available to consumers.
- Satisfy needs : it fulfills this function since it supplies the customer with what it requires. Of course, to achieve this you have to take your competitors into account, balance cost and profit, and draw up an action plan to achieve the expected sales.
- Offer goods : a commercial company knows in depth the movements of the market in which it operates. So you know what you have to offer consumers and induce them to buy it.
On the other hand, it is important to bear in mind that a commercial company can be public, private or have a mixed nature . Its size can also be very variable: it can be a micro-company –with a dozen employees-, a small organization with up to 50 workers, a medium-sized entity –with up to a hundred employees- or a large one.
You already know, broadly speaking, what an entity of a commercial nature consists of; Now we invite you to move on to the next section to find out the classification of commercial entities that is currently used.
Types of business enterprise
As we suggested in the previous section, there is no single type of business enterprise . We can distinguish 3 large categories that are the following:
As its name implies, it carries out wholesale trade activities. Companies in this category buy and sell raw materials or products on a large scale; then they distribute or sell them to retail companies or manufacturing industries. Wholesale supermarkets are a good example.
They are those firms that trade products on a smaller scale. They usually represent the final link in the production and consumption chain, because they are responsible for selling the items to consumers or customers. Here we can mention clothing stores or neighborhood supermarkets as examples.
Any commercial company that is dedicated to the sale of articles to other companies in exchange for an X commission, enters this category. They are intermediary companies in the buying and selling process. An example might be a car dealership; large industries provide a certain commission to these commercial premises for the sale of each vehicle.
Anyway, after reading this article you already know for sure what a commercial company consists of and what is the classification that currently operates for these companies. You have also been able to obtain numerous everyday examples of this type of business, which are undoubtedly present in our lives more than we could have suspected. Have you had any doubts on the subject? We invite you to enter your comment in the box that is enabled here below the post.
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