In economics, a commodity is a marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services, the word commodity came into use in English in the 15th century, from the French commodité, convenience. Going further back, the French word derives from the Latin commoditas, meaning suitability, the Latin word commodus meant variously appropriate, proper measure, time, or condition, and advantage, benefit. The term commodity is specifically used for a good or service when the demand for it has no qualitative differentiation across a market. In other words, a commodity good or service has full or partial but substantial fungibility, that is, the market treats its instances as equivalent or nearly so with no regard to who produced them. As the saying goes, From the taste of wheat, it is not possible to tell who produced it, a Russian serf and copper are other examples of such commodities, their supply and demand being a part of one universal market. Items such as systems, on the other hand, have many aspects of product differentiation, such as the brand, the user interface.
The demand for one type of stereo may be larger than demand for another. In contrast, one of the characteristics of a commodity good is that its price is determined as a function of its market as a whole, well-established physical commodities have actively traded spot and derivative markets. Generally, these are basic resources and agricultural products such as ore, sugar. Soft commodities are goods that are grown, while hard commodities are ones that are extracted through mining, there is another important class of energy commodities which includes electricity, gas and oil. Electricity has the characteristic that it is usually uneconomical to store, hence. Commoditization occurs as a goods or services market loses differentiation across its supply base, as such, goods that formerly carried premium margins for market participants have become commodities, such as generic pharmaceuticals and DRAM chips. Following this trend, nanomaterials are emerging from carrying premium profit margins for market participants to a status of commodification, there is a spectrum of commoditization, rather than a binary distinction of commodity versus differentiable product.
Many products degree of commoditization depends on the mentality and means. For example, milk and notebook paper are not differentiated by many customers, for them, other customers take into consideration other factors besides price, such as environmental sustainability and animal welfare. This is a list of companies trading globally in commodities, descending by size as of October 28,2011, on a commodity exchange, it is the underlying standard stated in the contract that defines the commodity, not any quality inherent in a specific producers product. Commodities exchanges include, Bourse Africa Bursa Malaysia Derivatives Chicago Board of Trade Chicago Mercantile Exchange Dalian Commodity Exchange Euronext and these markets will quickly respond to changes in supply and demand to find an equilibrium price and quantity
An auction is a process of buying and selling goods or services by offering them up for bid, taking bids, and buying the item to the highest bidder. The open ascending price auction is arguably the most common form of auction in use today, participants bid openly against one another, with each subsequent bid required to be higher than the previous bid. An auctioneer may announce prices, bidders may call out their bids themselves, in economic theory, an auction may refer to any mechanism or set of trading rules for exchange. The word auction is derived from the Latin augeō which means I increase or I augment, for most of history, auctions have been a relatively uncommon way to negotiate the exchange of goods and commodities. In practice, both haggling and sale by set-price have been more common. Indeed, before the century the few auctions that were held were sporadic. Nonetheless, auctions have a history, having been recorded as early as 500 B. C. According to Herodotus, in Babylon auctions of women for marriage were held annually, the auctions began with the woman the auctioneer considered to be the most beautiful and progressed to the least.
It was considered illegal to allow a daughter to be sold outside of the auction method, during the Roman Empire, following military victory, Roman soldiers would often drive a spear into the ground around which the spoils of war were left, to be auctioned off. Later slaves, often captured as the spoils of war, were auctioned in the forum under the sign of the spear, the Romans used auctions to liquidate the assets of debtors whose property had been confiscated. For example, Marcus Aurelius sold household furniture to pay off debts, One of the most significant historical auctions occurred in the year 193 A. D. when the entire Roman Empire was put on the auction block by the Praetorian Guard. On March 23 The Praetorian Guard first killed emperor Pertinax, offered the empire to the highest bidder, didius Julianus outbid everyone else for the price of 6,250 drachmas per guard, an act that initiated a brief civil war. Didius was beheaded two months when Septimius Severus conquered Rome, from the end of the Roman Empire to the eighteenth century auctions lost favor in Europe, while they had never been widespread in Asia.
In some parts of England during the seventeenth and eighteenth centuries auction by candle began to be used for the sale of goods and leaseholds, other unpredictable processes, such as a footrace, were used in place of the expiration of a candle. This type of auction was first mentioned in 1641 in the records of the House of Lords, the practice rapidly became popular, and in 1660 Samuel Pepyss diary recorded two occasions when the Admiralty sold surplus ships by an inch of candle. The London Gazette began reporting on the auctioning of artwork at the coffeehouses, the first known auction house in the world was Stockholm Auction House, founded by Baron Claes Rålamb in 1674. Other early auction houses that are still in operation include Dorotheum, Bonhams, Phillips de Pury & Company, Freemans, by the end of the 18th century, auctions of art works were commonly held in taverns and coffeehouses. These auctions were held daily, and auction catalogs were printed to announce available items, in some cases these catalogs were elaborate works of art themselves, containing considerable detail about the items being auctioned
A sale is the exchange of a commodity or money as the price of a good or a service. Sales is activity related to selling or the amount of goods or services sold in a time period. The seller or the provider of the goods or services completes a sale in response to an acquisition, requisition or an interaction with the buyer at the point of sale. There is a passing of title of the item, and the settlement of a price, the seller, not the purchaser generally executes the sale and it may be completed prior to the obligation of payment. In common law countries, sales are governed generally by the common law, a person or organization expressing an interest in acquiring the offered item of value is referred to as a potential buyer, prospective customer or prospect. Buying and selling are understood to be two sides of the coin or transaction. Both seller and buyer engage in a process of negotiation to consummate the exchange of values, the exchange, or selling, process has implied rules and identifiable stages.
It is implied that the process will proceed fairly and ethically so that the parties end up nearly equally rewarded. Sometimes, sellers have to use their own experiences when selling products with appropriate discounts, from a management viewpoint it is thought of as a part of marketing, although the skills required are different. Sales often forms a separate grouping in a structure, employing separate specialist operatives known as salespersons. Selling is considered by many to be a sort of persuading art, selling is the profession-wide term, much like marketing defines a profession. Recently, attempts have been made to understand who is in the sales profession. There are many articles looking at marketing, promotions, two common terms used to describe a salesperson are Farmer and Hunter. The reality is that most professional sales people have a little of both, a hunter is often associated with aggressive personalities who use aggressive sales technique. In terms of sales methodology a hunter refers to a person whose focus is on bringing in and this process is called sales capturing.
An example is a commodity such as a long distance sales person, shoe sales person. Their job is to find and convert buyers, a sales farmer is someone who creates sales demand by activities that directly influence and alter the buying process. Many believe that the focus of selling is on the agents involved in the exchange between buyer and seller
A stock exchange or bourse is an exchange where stock brokers and traders can buy and/or sell stocks and other securities. Stock exchanges may provide facilities for issue and redemption of securities and other financial instruments, Securities traded on a stock exchange include stock issued by listed companies, unit trusts, pooled investment products and bonds. Stock exchanges often function as continuous auction markets, with buyers and sellers consummating transactions at a central location, to be able to trade a security on a certain stock exchange, it must be listed there. Trade on an exchange is restricted to brokers who are members of the exchange, the initial public offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. A stock exchange is often the most important component of a stock market and demand in stock markets are driven by various factors that, as in all free markets, affect the price of stocks.
There is usually no obligation for stock to be issued via the exchange itself. Such trading may be off exchange or over-the-counter and this is the usual way that derivatives and bonds are traded. Increasingly, stock exchanges are part of a securities market. The idea of debt dates back to the ancient world, as evidenced for example by ancient Mesopotamian clay tablets recording interest-bearing loans, there is little consensus among scholars as to when corporate stock was first traded. Some see the key event as the Dutch East India Companys founding in 1602, economist Ulrike Malmendier of the University of California at Berkeley argues that a share market existed as far back as ancient Rome. One such service was the feeding of geese on the Capitoline Hill as a reward to the birds after their honking warned of a Gallic invasion in 390 B. C. Participants in such organizations had partes or shares, a concept mentioned various times by the statesman, in one speech, Cicero mentions shares that had a very high price at the time.
Such evidence, in Malmendiers view, suggests the instruments were tradable, the societas declined into obscurity in the time of the emperors, as most of their services were taken over by direct agents of the state. Tradable bonds as a used type of security were a more recent innovation, spearheaded by the Italian city-states of the late medieval. While the Italian city-states produced the first transferable government bonds, they did not develop the other ingredient necessary to produce a fully fledged capital market, the Dutch East India Company became the first company to offer shares of stock. Control of the company was held tightly by its directors, with shareholders not having much influence on management or even access to the companys accounting statements. However, shareholders were rewarded well for their investment, the company paid an average dividend of over 16 percent per year from 1602 to 1650. Financial innovation in Amsterdam took many forms, by the 1620s, the company was expanding its securities issuance with the first use of corporate bonds