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Difference Between Trade And Business

What is the difference between business and trade? 

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Tyler Larue eNotes educator | Certified Educator

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Trade refers to the buying and selling of goods and services, facilitated by a medium of exchange, such as money. When goods and services are exchanged for other goods and services, without the use of money, then we have a barter form of trade.

Business, on the other hand, refers to all those activities that are done with the aim of making a profit. As such, it includes business operations such as producing and selling goods or provision of services, investing activities such as the buying or selling of long-term assets, and financing activities such as the issuance of shares or bonds, repurchase of company stock and payment of dividends. Therefore, trade is a component of the business activity.

A business can also be defined as an organization where goods and services are exchanged for one another or for money.

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Olen Bruce eNotes educator | Certified Educator

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Business refers to the process of being involved in both commerce and trade to earn a profit. It involves the selling of goods, services, or information by one person to other people and is usually found in capitalist countries. Trade is a subset of business that involves buying and selling and in which one purchases goods or services from another person and pays for them. Business includes not only trade but also commerce, which refers to other activities involved in business, including advertising, purchasing, operations, finance, and so on. In other words, business is the entire enterprise of making, selling, and controlling the production of goods, while trade, a narrower activity, involves only the buying and selling of goods. Trade is a part of business, but business is not the same as trade.

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pohnpei397 eNotes educator | Certified Educator

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At least as used in the United States, these two words are used in so many different ways that it is impossible to really tell the difference between them.  At times, they can mean the same thing, at times not.

  • Business can refer to an actual firm, trade cannot.  You can say "the business that he runs" but not "the trade that he runs."
  • Trade usually refers to imports and exports.  If you use the word in the US, that is what is people will assume you mean.
  • For commerce in general, Americans usually use the word "business."  We say "business is picking up in the service sector."

But some of these things, at least, are used differently in England, at least, so depending on where you are, this answer may not be accurate.

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krishna-agrawala | Student

Business is a term used for all the activities performed by a business enterprise. This includes three basic activities of buying, manufacturing and selling. In addition a business may carry out additional activities such as product design, advertising and financing. Based on this basic meaning, the word business may also be used in several related ways such as a firm or enterprise in business activities, the overall state or performance of such firm (for example, "how is business?"), and group of firms or their activities connected with a common product (for example, automobile business).

In contrast, trade refers only to the buying and selling activities, which form a part of business activities. The word trader is often used to describe business firms, such as wholesalers that are primarily engaged in buying and selling activities. Also the word trading is used more often to describe buying and selling activities involving large quantities between traders rather than selling to retail customer. Usually import and imports and exports involve buying and selling of large quantities between traders, and therefore it is more common to use term trading for such activities.