This article throws light upon the five stages of development of commerce. The stages are: 1. Primitive Stage 2. Barter Stage 3. Start of Trading 4. Town Economy Stage 5. International Trade.

1. Primitive Stage:

In the olden days, the needs were very few and men produced only those things which they essentially needed and consumed. The man tilled the soil and produced what was necessarily required to keep him alive and to live in society.

The whole of the family was involved in fields and the ladies made clothes to wear. They built their own houses and there was no division of labour. The entire work was done by self. So, in primitive stage, commerce was not known and not needed too.

2. Barter Stage:

As the people built their own houses, they concentrated at one place and in this way, villages and where concentration was more towns sprang up. As men gained experience they started producing more than they needed for consumption and they wanted to dispose of the excess goods.


Since some needs also enlarged, it was not possible for man to produce all the things he needed. So the exchange or barter system started. That is exchange of goods for goods on reasonable terms.

Men began to produce only those goods in which they were specialised or which appeared to be advantageous to them and this created the position for exchange of goods. This resulted in division of labour.

3. Start of Trading:

The greatest drawback of a barter system is that you have to find a man who has the goods you need and is prepared to accept the goods you possess. This was a difficult job and as such the exchange of goods was few and far between.

This difficulty was, however, overcome to some extent by holding of mandis where the sellers and buyers assembled and got the exchange of goods. This too, was not of much help as mandis were held only for few days only in a month and at fixed places only. Though the trade came into existence but only to a very limited extent.

4. Town Economy Stage:


With the passage of time, some villages grew bigger and took the shape of towns and cities. This stage came to be known as town economy stage. At this stage, with the introduction of money economy in exchange of goods, men began to manufacture and produce for local markets. Towns took up the manufacturing of goods and villages devoted their energies for production of agriculture goods only.

So the villagers in exchange of agriculture goods exchanged manufactured goods. This resulted in the division of labour to a great extent. In towns, traders were divided into wholesalers and retailers. Trade came to be regulated by guides. Commerce, in its modern sense, came into existence in relation to domestic trade.

5. International Trade:

The final stage in the development of commerce was reached with the extension of international trade. Goods were not only produced for domestic use but also for selling to foreign countries. Materials were also procured from all the corners of universe. Such of the goods after having passed through the variety of processes of industry are conveyed to various countries to cover their demand by means of commerce.

The most important commercial industries are the railways, motor transport. Sea ships and by means of air. Besides this there are various means of transport by road which carry goods from one place to another for sale to the consumers to meet their demand.