MODUL PERKULIAHAN

Mata Kuliah English For Business

Module 1:
Business, Commerce, and
Trade
Mahasiswa mampu memahami berbagai terminologi bisnis dan perdagangan
internasional serta menerapkannya dalam kalimat atau dialog berbahasa
Inggris.
program tatap muka
fakultas kode mk disusun oleh
studi
ilmu budaya program

01
cdp
studi bahasa
inggris s1

Abstract Kompetensi
Bab ini mengeksplorasi Mahasiswa memiliki kemampuan
kemampuan dan keterampilan memahami dan berlatih menerapkan
berkomunikasi mahasiswa terminologi bisnis dan perdagangan
dalam dunia bisnis dan internasional dalam kalimat
perdagangan internasional. berbahasa Inggris.

English For Business Biro Akademik dan Pembelajaran http://www.widyatama.ac.id

1 CDP
MODULE 1

1 Business, Commerce, and Trade

Business, Commerce, and Trade

A. Difference Between Business, Commerce, and Trade

Commerce and trade are two distinct terms involved in business activities. Trade is a subpart of
commerce and carries narrow scope in comparison to commerce.

In simple terms, trade refers to buying and selling of goods between customers and sellers in
return for money. Whereas, commerce in addition to buying and selling of goods also includes all
those activities needed for completing exchange of goods between producers to ultimate
consumers. It includes various services which aid trade such as transportation, insurance,
warehouses, advertising, banking and many more.

Trading activities bring association between seller and buyers. Commerce links together the
producer of goods and end consumers by facilitating the exchange. Trade is a social activity as it
aims at satisfying the needs of buyers and sellers.

But commerce focuses on earning profits for several parties involved in its services and thereby
is an economic activity. Dissimilarities between the trade and commerce can be well-understood
more clearly from comparison chart given below.

Difference Between Business, Commerce, and Trade

(Commercemates.com, 2022)

Basis of
Business Commerce Trade
Difference

Commerce refers to all Trade refers to

Meaning Business refers to all
activities which exchange of products
those activities which
facilitates the exchange or services among

English For Business Biro Akademik dan Pembelajaran http://www.widyatama.ac.id

2 CDP
Basis of
Business Commerce Trade
Difference

are done with the aim of of goods from producer buyers and sellers in
earning profits. to end consumer. return for money.

Narrower as is
Wider. It includes both Wider than trade, as it
concerned with only
Scope trade and commerce comprises of activities
buying and selling of
within its activities. which supports trade.
goods.

Between owner and Between producer and Between buyer and

Connectivity
clients. consumer. seller.

Huge amount of capital More amount of

Capital needed Requires less capital.
is needed. capital needed.

Side Supply side of the Both demand and

Only demand side.
represented product. supply side.

Riskier than trade and

Risk level Riskier than trade. Low risk
commerce.

Transactions
Regular Regular Isolated
frequency

More employment
Large number of
opportunities as large
Employment opportunities due to
number of people are Very few.
Opportunities presence of many
required for performing
activities.
different tasks.

B. International Commerce and Global Trade

International commerce is the practice of buying and selling goods and services between nations.
With international commerce, sovereign states leverage competitive advantages of their home
countries to buy and sell elsewhere.  A competitive advantage could be an extra-long coastline,

English For Business Biro Akademik dan Pembelajaran http://www.widyatama.ac.id

3 CDP
like Chile has; proximity to certain natural resources, like lumber (Canada) or fish (Portugal); or
a highly educated, technically trained workforce (South Korea, Sweden, Israel).

With all of these different countries participating in the international commercial system, each
with its own set of sovereign laws, it is important that global regulatory agencies exist to create
some legal cohesion. The two main organizations overseeing international commerce are the
International Chamber of Commerce (ICC) and World Trade Organization (WTO). The WTO
does have a hand in regulating international commerce, despite there being a difference between
commerce and trade.

There is a technical distinction between international commerce and global trade. Trade refers to
the basic economic activity of buying, selling, and/or exchanging goods and services between
two or more parties in a marketplace. Commerce encompasses all activities that promote the
exchange of goods and services—from the point of manufacture to the moment a customer
purchases a product in a store.

Questions

1. Using your own words, what is the difference between business, commerce, and trade?
2. Find definition and meaning of the following business terms:
a. Customer
b. Seller
c. Goods
d. Service
e. Profit
f. Capital
g. Banking
h. Freight
i. Advertising
j. Marketing
k. Warehousing
l. Insurance

C. Reading
Getting started
Discuss the questions below with your group and then do the exercise which follows them.
1. What are the different types of trade discussed so far?

2. Who are the different people involved in this trade?

3. What role would they play in the process?

English For Business Biro Akademik dan Pembelajaran http://www.widyatama.ac.id

4 CDP
Vocabulary
Look at the terms below. Using what you have learnt about definitions, can you write one for
each term? Write the definitions for the following terms in your own words. Then check your
answers as you read the text. Do not use the text to find the definitions.
Term Definition
1 Export trading company
______________________________________________
______________________________________________

2 Export management
company
______________________________________________

3 Distributor ______________________________________________
______________________________________________

4 Retailer ______________________________________________

______________________________________________
5 Import export agent ______________________________________________
______________________________________________

6 Sales representative ______________________________________________

EXPORT TRADER

Trade has existed ever since Man recognized the need to look for and obtain resources to
fulfill his needs. From early man trading skins and salt with neighbouring tribes to Marco Polo
bringing silks, spices and technology from the Far East to the Western world, to modern
conglomerates trading millions of dollars on the stock exchange, trade has been an essential part
of our lives. Countries engage in trade for many reasons. These include product availability,
competitive prices and product image. But for the goods to reach the customer, they must go
through the import/export process and pass through the hands of different players along the way.

English For Business Biro Akademik dan Pembelajaran http://www.widyatama.ac.id

5 CDP
The word import comes from the Medieval Latin importare which means to bring in which, in
essence, is done when goods are brought in from a foreign country, while export is the process
by which goods are shipped from one country to another. There are two main methods of export:
direct and indirect exporting. In direct exporting, the manufacturer, assembler or processor of an
exported good is in charge of the entire marketing and distribution of the product and sells
directly to companies, known as direct merchants, in the foreign market. The direct merchant
then sells these goods on their domestic market. These merchants usually offer complementary
services such as maintenance, spare parts and technical support to their customers.

However, a cheaper and less risky export route is through indirect export where the
manufacturer hires a local agent to find and deliver its goods to buyers abroad. An example of
indirect exporting is through an Export management company (EMC) which handles trade for a
domestic company which wants to sell its product abroad. The EMC hires the dealers,
distributors and representatives, manages the advertising, marketing and promoting of the
product, oversees marking and packaging, and arranges the shipping. An Export management
company can specialize in one type of product, foreign market or both and is usually paid by
commission, salary or a retainer plus commission.

Another type of indirect trading agent is the Export trading company (ETC) which looks for
potential buyers by identifying the needs of the foreign market and then supplying domestic
sources willing to fill this need. It can either take title to the goods or work on a commission
basis. An Import/Export company, on the other hand, purchases goods directly from a domestic
or international client and then packs, ships and resells these goods.

There are also a number of intermediary players. For example, an import export agent is one
who rarely invests capital in inventory or deals in the merchandise, products or services directly.
Instead, this agent acts as an intermediary between manufacturers and distributors in one country
and buyers in another, finding the appropriate market for the goods, making a solid connection
and solidifying a business relationship between both parties. They are paid a commission which
is usually 10% of the transaction. Manufacturers may also decide to have their own
representative who is an expert in their particular industry and can give technical support. This
specialization may differentiate them from the sales representative who simply promotes the
product and then passes the sale to the seller. A distributor buys the imported product and then

English For Business Biro Akademik dan Pembelajaran http://www.widyatama.ac.id

6 CDP
sells it to another for further distribution to the buying public. Finally, there is the retailer who
then sells the merchandise to the customer.

There are many different kinds of agents involved in the import and export trade and the best

type would depend on the needs, and capabilities of the manufacturer who wishes to place his

product on an international market. From export management companies to individual sales

representatives, there is a group of qualified individuals able to help in this process.

Checking your understanding of the text

Form three groups. Each group has to do the following:
1. Write six (6) questions based on the text. Remember to check the grammatical structure of
your question.
2. Give your questions to members of the 2nd group for them to answer.
3. Give the answers to members of the 3rd group for them to be corrected.
4. Discuss the answers with the entire class.

References
1. Cruz, Didier J.C. “Introduction to International Trade”. accessed August 11, 2022
https://www.academia.edu/29941691/ENGLISH_FOR_INTERNATIONAL_TRADE_1_M
aterial_researched_and_adapted_by_Introduction_to_International_trade
2. Shopify. April 8, 2022. “International Commerce”. Accessed August 8, 2022.
https://www.shopify.com/blog/international-commerce
3. Commercemates.com “Difference Between Business, Commerce, and Trade”. Accessed
August 8, 2022.
https://commercemates.com/difference-between-business-commerce-trade/
4. http://www.entrepreneur.com/startingabusiness/businessideas/startupkits/article41846.ht
ml

English For Business Biro Akademik dan Pembelajaran http://www.widyatama.ac.id

7 CDP